The market has failed at its long-term downward trendline and 200-dayMA for the second time. This hints at a top, with risk through 1.2649 to 1.2320.
EURCAD has failed for the second time at its multi-year downward trendline, printing marginally above to a high of 1.2915. We expect the market to remain capped by the 1.2915-1.3015 resistance zone and we see potential for price to complete a bearish inverted head and shoulders top. We emphasise that weekly slow stochastics have produced a bearish crossover and are beginning to turn lower. We highlight the threat of a bearish head and shoulders top and we expect this to be complete through 1.2649/1.2573, allowing price to extend lower to 1.2321 78.6% retracement support. Below here exposes 1.2129. Only the removal of 1.3024 neutralises topping threats and allows the market to extend higher to 1.3485/1.3521.
Trading Strategy: Sell at 1.2858, targeting 1.2328, stop at 1.3028.
Credit Suisse