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TREND IN FOCUS: EURCAD (D1)
- The EURCAD is tied for the strongest momentum score at today’s benchmark, tied with the CHFJPY and the EURJPY at +3.14.
- Overall, the Euro has momentum firmly in its favor, with four crosses with scores greater than +2.50 (EURCAD, EURGBP, EURJPY, and EURUSD).
- The recent tag of the 55-SMA just above C$1.3400 served as the springboard for price to accelerate back to the descending trendline off of the June 24 and July 2 highs, today at 1.3670; a recent test and failure at the same trendline occurred on July 14.
- The daily Slow Stochastics (5,3,3) remain in a strong uptrend the past week; although relative to the most recent bearish crossover, the indicator is stronger relative to price (bearish divergence).
- Accordingly, either a breakout through 1.3670 into 1.3800/20 is necessary to clear divergence; or failure should occur to clear the technical incongruity, which could see price back to 1.3520 (61.8% Fib June 2011 high August 2012 low).
Read more: Chinese GDP Sets Table for Improved Risk Amid CPI Data from EZ, UK, US
*Trend definitions: “uptrend” is defined as 8-MA>21-MA>55-MA; “downtrend” is defined as 8-MA
*Scoring methodology: there are seven time frames, ascending from m15 (15-minutes) to W1 (one-week). In ascending order, each pair is assigned a value from -7 to +7 based on the trend apparent on the specified time frame (I.E. a m15 uptrend equals +1, whereas a H1 downtrend equals -3). If neither an uptrend nor downtrend is present, the trendless timeframe receives a score of 0. These points are totaled and the average is reported on the right. The strongest uptrend would achieve a score of +4.00, while the strongest downtrend would achieve a score of -4.00.
--- Written by Christopher Vecchio, Currency Analyst
To contact Christopher Vecchio, e-mail cvecchio@dailyfx.com
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DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.
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