Euro-Canadian dollar exchange rate overcame wedge resistance
The euro exchange rate against the Canadian dollar began to fall dynamically with the beginning of this year. However, in the second half of January, the rate of decline slowed down. The slowdown in the decline led to the formation of a wedge, which is sloping in the direction of the movement that precedes it. Such formations often lead to reversal. This seems to be the case here.
As you can see in the daily chart below, last week there were several attempts to break the resistance of the wedge, of which only the last one on Friday, was successful. The weakening of the Canadian dollar, after the publication of economic growth data, contributed to this.
At the beginning of this week, we are witnessing a slight correction in Friday’s growth. The closest support in the event of a deepening of the correction is around 1.5047.
It is possible, however, that after a significant breakout from the wedge formation, buyers will try to maintain control over EUR/CAD. In such a scenario, after overcoming last week’s maximum at 1.5118, the price may continue in the direction of 1.5180 and 1.5250.