Hidden Periodicity and Pitchfork Suggests Short-Term Support
CAD is otally coupled with the price of oil, which is the major factor in this currency couple in recent times. The fact that EUR gained a lot during the first COVID-19 lockdown was mainly due to the price of oil going downwards. This was evident as well during the recent Suez canal blockage, which started a new bullish run for oil and a pull back for EURCAD. Yet, there is a hidden pattern at play here, one which can be shown using the sinusoidal of wavelength 5 months. The prices have been going up and down consistently through this pattern since a couple of years, mainly due to market dynamics, often augmented with political events.
Following this pattern, you can see that we are approaching a crest in the sine wave, yet we are a law low point in the dominant bearish trend. Also, oil prices are increasing since the Suez crisis, which suggests that the pattern might not be followed. Yet, careful pitchfork analysis shows that we are currently at the line of support, which is also confirmed by the lower Bollinger band, as well as the almost over-selling RSI.
The bearish trend doesn't seem to be waning anytime soon, since most of the action is take place in the lower side of the pitchfork. However, for the short-term, the price is going higher and now sounds like a good short-term buy.
Following this pattern, you can see that we are approaching a crest in the sine wave, yet we are a law low point in the dominant bearish trend. Also, oil prices are increasing since the Suez crisis, which suggests that the pattern might not be followed. Yet, careful pitchfork analysis shows that we are currently at the line of support, which is also confirmed by the lower Bollinger band, as well as the almost over-selling RSI.
The bearish trend doesn't seem to be waning anytime soon, since most of the action is take place in the lower side of the pitchfork. However, for the short-term, the price is going higher and now sounds like a good short-term buy.