EUR/CAD 1H Chart: Descending Triangle

The European common currency has been trading against the Canadian Dollar in two formations simultaneously. In mid-April, the pair entered an intermediate descending triangle. The pair stuck to the upper trend-line for a while, thus forming a junior channel down. Moreover, it tested the bottom boundary of the senior patter for a week prior to edging towards the upper boundary. This attempt was unsuccessful, rising doubts about the Euro’s ability to remain in the triangle. Thus, it seems that the pattern has reached maturity and should break out soon. Near-term technical indicators, however, still suggest that a re-test of the 1.4600/1.4700 territory, reinforced by the 55-hour SMA, may occur. Near term support, on the other hand, is formed by the 200-hour SMA circa 1.4575. Subsequently, the base scenario favours the prevalence of the channel down that should lead the rate lower.