EURCAD – Sentiment turns Negative
11th September 2017
Last week’s EURCAD decline confirmed the negative RSI crossover of a few weeks ago but break below the 21 week moving average. That close was the first below the key line since April and provides a bearish tone for sentiment in the coming weeks.
A positive trend had been indicated in March with ‘golden’ crosses of both EURCAD spot and the RSI indicator. Prices rose by almost 9 big figures – stretching the top of the weekly Keltner channel and trading to the highest levels since November.
The importance of the 21 week average was emphasised by the fact that the subsequent setback from May’s peak was limited by the average and encouraged the next EURCAD up move – almost 6 big figures from July’s bottom.
Interestingly the fall to July’s low created a negative crossover of the RSI. This was the first indication that the bullish bias was under threat. The fresh buying pressure peaked last month at significantly lower levels and this was the second warning of the growing potential for a change in investor sentiment. And the last indicator, confirming that EURCAD is now clearly bearish came, as mentioned above, with last week’s 2nd down week in a row, from August’s peak.
Monday has already seen that decline deepen and we’re looking for the cross to target EURCAD’s July 1.4481 base then 1.4348, a 62% correction of the rise from this year’s low point.
Bearish Crossovers
