The EUR/CAD currency pair is currently facing challenges as it hovers around the 1.4810 level, following three consecutive days of losses. This development suggests a prevailing bearish trend, with market indicators pointing to sellers maintaining a dominant position. Nevertheless, the pair may be nearing oversold conditions, which could open the door for a potential rebound.
Analyzing the daily chart reveals that EUR/CAD is trading below the nine-day Exponential Moving Average (EMA), which has acted as a consistent resistance point in recent sessions. Additionally, the nine-day EMA has diverged below the 14-day EMA, indicating a “bearish crossover.” This crossover highlights a decline in short-term momentum and underlines the ongoing downward pressure on the pair.
The 14-day Relative Strength Index (RSI) currently rests slightly above the critical 30 level, indicating sustained bearish momentum without reaching full oversold status. Should the RSI fall below this level, traders might look for signals of an upward correction. A recovery from these oversold levels could push the pair into the 1.4850 – 1.4900 range, where sellers may reassert control and test the strength of any potential rebound.
On the downside, the psychological level of 1.4800 stands as a crucial support point. If the selling pressure persists, this level may attract buying interest from traders anticipating a turnaround. However, if EUR/CAD dips below 1.4800, the next significant support lies at 1.4700. This level is pivotal for traders as it could slow the downward move or further reinforce the bearish trend, with a break below potentially steering the pair towards its seven-month low of 1.4587.
Conversely, on the upside, resistance can be found around 1.4870, a level that has transitioned from support to resistance. A break above this level might suggest a cautious emergence of bullish sentiment among traders. If this occurs, attention would likely shift to the nine-day EMA at 1.4918 and the 14-day EMA at 1.4949, which serve as critical resistance thresholds that must be surpassed for any significant bullish move to occur.
