EurCad is leaning on the 1-year average that is acting as a reliable watershed between the bullish and the bearish scenario from more than 15 years. This level is wedged between the 50% and 61.8% of retracement of the entire rise started in April but it is clear that, unlike EurUsd, the Canadian dollar is a currency in distress, caught between a weak economy and a very low oil price.
If the QE2 effect will not be so surprising, we can expect that the strength of the Cad on the Euro may have run out here, making the long trade EurCad an exciting opportunity in the week that will take us to the meeting of the ECB.
We have just reached a break with the Turkish Lira. The exchange ratio EurTry has finished last week below the bullish trend line in place since January. We can also find the 50% of retracement of the entire bull market at 3.04, as well as the top in April 2015 and December 2014.
The ADX at 40 shows a short term bearish trend that is continuing to gain strength clearly defined by the 20-day moving average of 3.15. A final breakthrough of 3.04 this week would make the long trade on the Turkish Lora very interesting while on the other side, an overcoming of 3.15 in fact would put an end to the corrective phase of the last two months.
UsdJpy is approaching, without success, to the high of June and August. These resistances are also fundamental in a long-term perspective and the fact that the market has refused to rise even above the old bullish trend line is a sign of weakness not to be overlooked. UsdJpy seems, therefore, to have closed a classic corrective sequence that might anticipate a fall at least up to area 121. That should be the more interesting support zone, but the low of October will have to be put in quotation below 121, with a bear market that could surprisingly change its mind on UsdJpy.
We do not know if the figure that is forming on EURGBP is a bullish head and shoulder one, but certainly the potential is there. After the Bank of England froze the expectations about a potential rise in interest rates in early 2016, the cross reacted with a classic bullish engulfing pattern figure. Obviously the disappearance of speculation on rates is likely to cool the enthusiasm on the Pound which is struggling on the lower wall of a bearish long term regression channel.
The low of July 2015 of 0.693 has not been violated on Thursday and the potential neck line is crystal clear in area 0.75. Here we could try the long EURGBP.
Eur Jpy seems to rest on a more and more fragile land, but the level reached on Friday is certainly one of the more interesting from a trading perspective. As we can see from the chart, the support projections are noteworthy.
The 61.8% of retracement of the whole rebound is positioned at 131.50, but on this level we can also find the statistic supports linked to the highest of March. Besides these, the same trend line joining the two lows of July and September passes here. Summarizing, we can therefore say that the last call for the Euro has arrived, and at this point it will have to react, or the bearish break will give much more strength to the Yen.