EUR/CAD weakened for a fourth consecutive day as European officials struggle to make any progress with the Greek government regarding debt relief or an extension. Price action on the EUR/CAD daily chart shows that recent consolidation appears to be signaling a key break towards the bottom of the 2015 range.
Price over the past two trading session has now dropped below both the 100- and 50-day Simple Moving Averages(SMA)s. In the short-term, we could see price continue to weaken towards both the 127.2% Fibonacci expansion level of the B to C leg and the 70.7% Fibonacci retracement of the X to A rally. If price does stabilize around the 1.40 handle, a bullish Gartley pattern could support a temporary rebound towards the 1.4150 region. If downward momentum invalidates the potential pattern critical support will come from 2015 low of 1.3753.
In the event, we see a euro rally major resistance will come from the 200-day SMA at 1.4359.
The trade: Sell EUR/CAD at 1.4120 with a stop loss at 1.4170 and a take profit at 1.4020. The Risk/Reward Ratio is 1: 2
Edward J. Moya
WorldWideMarkets Online Trading