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EURCAD Continues move down

Market Analysis

EURCAD, Daily               

The dollar consolidated post-Yellen gains in the pre-London session in Asia. USDJPY steadied after rallying over a big figure to a 114.50 high in the wake of Fed Chair Yellen’s testimony before the Senate, where she left the door open for a March hike, which was enough of a surprise from the normally dovish Yellen to prompt a market reaction. USDJPY left a high of 114.50 following her testimony, and subsequently edged out a new peak at 114.51 in Tokyo before the pair subsequently held steady around 114.30-40. Yield differentials and a positive risk-appetite, with Yellen striking the “right” balance between dovishness and hawkishness, have conspired to keep the yen on a back foot, and we would expected USDJPY to clear 115.00 shortly, and or target from Monday (February 13) of 115.10 with the January-27 high at 115.37 offering a target thereafter. Our target 2 remains at 116.00.  EURUSD clocked a one-month low at 1.0561, since settling at modestly firmer levels. Other dollar pairings have seen similar price actions.

The weakening euro and a rise in Oil to short term high as prompted a SHORT position in the EURCAD from 1.3856 with target 1 1.3805 and target 2 1.3750 at the 14 period ATR. MACD, RSI and Parabolic SAR are all negative. The longer term Weekly and Monthly trends are also negative.  Resistance to the upside would be a break of the 1.4055 level and the 20 day moving average

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Stuart Cowell

Senior Market Analyst

HotForex

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