today I analyzed the EUR/CAD forex pair and I came with the following projections (forecasts) for 1 month, 3 months and 12 months.
Hereunder are my forecasts for the EUR/CAD.
– 1 month: 1.4650
– 3 months: 1.42-1.144
– 12 months: back to 1.50 area (after a move into the 1.3850 lows)
Hereunder is the rationale for this analysis:
1. Price of EUR/CAD failed the sequence of measured movehigher and Program Trading is now looking to push it down into the 1.3850 areawithin the next year. On the weekly timeframe a measured move short is trading nowat its first target. We could get lower to the second target at around 1.465 and then wecould see a bounce that could last 2-3 weeks. In 1 month time I anticipate themove lower to have resumed and we could see prices at current or lower levels,again around that second target 1.4630.
2. 1.43 is the level to watch in the medium term (3 months). I anticipate the EUR to continue falling against the CAD for a numberof reasons:
1) first of all Program Trading is currently not committed to longs in theEUR/CAD market. The next level where long-term Program Trading will commit ison the long side is 1.38 in my opinion.
2) Moreover the two pairs we can break theEUR/CAD into, the EUR/USD x USD/CAD are both moving lower. There are technical and fundamental reasons to believe that the EUR/USD will move to test 1.30, while USD/CAD has tested resistance at 1.12 and is now correting into 1.04 and potentially lower. The EUR/CAD is not going to move higher.
3. On the larger timeframes the EUR/CAD is bullish. Bybreaking recent high levels (1.55) before the start of the move lower , this pair confirmed bullishness on the long term. The retrace we are going to witness in the coming few months, is not long-term weakness, but rather a medium-term correction that only reflects the way healthy markets work. There is no interest for long-term Program Trading in long positions, at this stage, and this will mean that algos on the smaller timeframes, e.g.daily and 4-hour, will be able to push price lower into the next area of support for long-term Programs.
That area starts at 1.3850. If/when price gets there, the behavior of long term Program at those levels will tell us the full story. If we get participation from Program Trading, in 1 year time price could go back to current levels or higher.
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Have a great day
Giuseppe, ~the FibStalker