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Forex Workshop – EURCAD Forecast – December-29-2023

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In today’s Forex workshop, we will first examine the price action of the EURCAD currency pair in the daily chart. Following that, we will look into EURCAD forecast and what could be next for the pair by scrutinizing the technical indicators as well as key support and resistance levels.

EURCAD Forecast: A Technical Analysis

FxNews – As of this writing, the EURCAD price stands at 1.6219, which is 0.15% higher than yesterday’s closing price. To begin our EURCAD forecast, it’s essential to identify key levels such as support, resistance, pivot points, and Fibonacci levels. My preferred timeframe for marking these key levels is the daily chart. It provides a broad insight and is significantly helpful in identifying critical support and resistance levels.

As depicted in the EURCAD daily chart below, our key resistance level is at 1.6278. The market has reacted to this level six times, as indicated by the arrows in the image.

Forex Workshop - EURCAD Forecast

Forex Workshop | EURCAD Forecast | Daily Chart

The 1.6278 resistance level held firm against yesterday’s bullish momentum, leading to a price retraction. Interestingly, this resulted in the formation of a long wick candlestick pattern on the chart.

The next step in our EURCAD forecast is to determine the trend direction. There are several tools that traders can utilize for this purpose, including moving averages, the envelopes indicator, or Bill Williams’ alligator. However, in this technical analysis, I am using a channel. To draw a channel on a forex chart, connect two parallel lines: one line along the swing highs (resistance) and the other along the swing lows (support). Ensure the lines are parallel to each other.

As shown in the image below, the EURCAD price is trading within a bearish channel. We conclude that the market trend is bearish, and therefore, our focus will be on short trades.

Forex Workshop EURCAD forecast

Forex Workshop | EURCAD Forecast Daily Chart

EURCAD Forecast: A 4-hour Chart Technical Analysis

I zoomed into the 4-hour chart for a more detailed insight into the price action. I am repeating the same technical analysis for the 4-hour chart to ensure both timeframes align and do not provide conflicting signals.

support and resistance

Forex Workshop | EURCAD Forecast | 4-hour Chart

A new channel has been added to the 4H chart. As illustrated, the market trend is also within a bearish channel. However, the awesome oscillator signals divergence, raising my concern about a potential trend reversal or consolidation phase. Concurrently, the RSI indicator is hovering above the middle line, signaling weak bullish strength.

From this technical analysis, we learn that while the market trend is bearish, the technical indicators suggest potential trend reversal or consolidation phase.

awesome oscillator divergence signal

Forex Workshop | Awesome Oscillator Divergence Signal | 4H Chart

Final Thoughts on EURCAD Forecast

The key support level is at 1.61, which has been tested twice. The first bounce from this level occurred on December 20, followed by another on December 23, 2023. As long as this level holds, the EURCAD price may rebound and test the upper band of the bearish flag in the 4-hour chart. This level is further supported by the 23.6% Fibonacci resistance at 1.6308.

In line with the main market trend, which is bearish, we can plan an entry point around this level. From a technical analysis standpoint, traders should look for bearish candlestick patterns if the price rises to the 23.6% Fibonacci resistance.

  • 29 December 2023
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