The EURCAD pair has seen steep declines in 2018 as NAFTA cycles in and out of the headlines. It is part of a wider trade story that is dominating markets and adding a layer of fundamental factors alongside Central Bank and Economic data. The news over the weekend was that if Canada did not agree a deal with the US on NAFTA then President Trump would place auto tariffs on Canada.
On the weekly chart we see that the price fell to support at 1.4920 last week and broken into the area of two supporting trend lines. A rebound higher needs to stay above 1.5000 to have any hope of retesting 1.2519. A break above this level targets 1.5374 followed by 1.5600.
Support for the pair can be seen at the blue rising trend lines. They represent long term support on the weekly chart. A loss of the area around 1.4900 can trigger a wave of sustained selling with initial targets at 1.4800 and 1.4733. A drop under this level would see the next level of support at 1.4445 ahead of 1.4400. From here traders could see a rapid drop to 1.4200 and the 1.4185 area. Below 1.4000 the previous low came in at 1.3800.
In EURUSD price moved lower last week to support at 1.1364 after breaking the 1.1500 level and triggering extra short positions. The price was consolidating above 1.1510 with a high around 1.1850 setting up a move to test 1.1170 on a measured leg lower. This would need to see a break of 1.1300 followed by 1.12665. The 1.1200 is likely to provide support with a continued drive lower shifting focus to 1.1074. Ultimate downward targets remain around 1.0500. For now there is a chance that price would go up to retest the broken trend lines around 1.1500.
A move up to resistance would give traders an opportunity to engage with the market and shake out weak positions. At 1.1500 a decision has to be made, if the break was valid resistance should hold, however if the break down was false price could quickly reverse to test the key 1.1615 area. A quick move to 1.1752 could follow and traders may attempt to pressure 1.1800. A break higher puts 1.1856 into focus. This level would be of great importance in establishing a any subsequent breakout higher.