Pressure Mounts: Will EUR/CAD Hold Its Ground or Break Down?
11 November 2024
Euro to Canadian dollar is currently under significant pressure as it tests a crucial horizontal support level marked in orange. This level has a well-established history on the chart: first serving as a resistance in June before transitioning into a reliable support in August, September, October, and the early days of November. The November reaction initially hinted at some buyer strength, but seller momentum has since intensified, putting the support under heavy strain.
The current battle at this level suggests a possible breakdown. If sellers succeed in breaching this support, the next key focus will be the black uptrend line. This uptrend line represents the buyers' final line of defense, and any move below it would solidify a strong sell signal, potentially triggering a significant bearish phase.
While the potential for a bounce still exists, it would likely require the formation of a bullish candlestick pattern such as a hammer or a bullish engulfing to reinvigorate buyer confidence. However, given the current selling pressure and the weak position of buyers, the odds of a sustained bounce appear limited. Traders should prepare for the possibility of a deeper drop if the current support fails to hold.