Eurcad In Oversold Territory

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Eurcad In Oversold Territory

Eur/Cad In Oversold Territory, Faces Correction Risk

EUR/CAD has touched the 1.4385 which is a multi-month low for the pair. Overall, EUR/CAD declined by 0.30% on Tuesday and is now trading at the lowest level seen only in July.

Meanwhile, all the indicators are also moving lower, including the MACD and the RSI. Both of these indicators suggest that EUR/CAD is under the grasp of the bears. That's also increasing the bearish pressure for the EUR/CAD.

Eur/Cad: Rsi Shows 29 Reading

look at the RSI on EUR/CAD chart shows a reading of 29. That's right inside the oversold area, which suggests the presence of strong selling pressure.

quick look at the MACD shows that the histogram is rising and turning red. Once again, this hints at more downside for the EUR and an appreciation of the CAD.

If the EUR/CAD manages to close below 1.4785 on a daily basis or in a higher timeframe, the downside trend will be further reinforced.

However, the oversold readings from the RSI also hint that the EUR/CAD might go through a correction. If that happens, EUR/CAD will likely cross the 1.4800 resistance first before moving to the next level.

Beyond the 1.4800 lies several resistance levels, such as 1.4850, 1.4900, and 1.4930. All of these are important levels and can serve as resting points for the EUR bulls.

However, it is also normal for the EUR/CAD & other FX pairs to stay in oversold conditions for extended periods of time. So, if EUR/CAD spends another few weeks to a few months at monthly lows, it wouldn't be a major surprise.

If we look ahead, things are looking difficult for the Eurozone in economic terms. With Trump assuming office in a few months, Europe is now at risk of high tariffs from the USA.

That will surely hamper the economic activities in the Eurozone and lead to tough times. Even a tariff of 10% could seriously impact the Europe's exports to the USA.

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