FX.co ★ bakayaro | EUR/CAD

The EUR/CAD currency pair on the weekly (W1) chart has recently been trading in a sideways range for several consecutive weeks, showing only a slight downward slope compared to the previous trend. Despite expectations for a stronger correction following the significant bullish movement seen earlier, the market has remained relatively stable. The overall wave structure still reflects a broader upward trend, while the MACD indicator has moved into the lower zone and continues to stay below its signal line, suggesting weakening bullish momentum. Looking back to late 2024, a clear five-wave structure can be identified. This pattern represents a complete growth cycle, after which a corrective phase would normally be expected. That correction now appears to be underway, although it has developed much more slowly than anticipated. Even the bearish divergence that was previously visible on the indicator has not yet produced a significant decline. However, because this divergence appeared on a higher timeframe, it remains a strong bearish signal and should not be ignored.

The monthly chart provides additional evidence supporting a bearish outlook. A major resistance zone is located nearby, where three significant historical peaks were formed in previous years. The breakout above these peaks has effectively created a strong selling area, reinforcing the possibility of a larger downward move. Given the number of bearish factors currently present, short-term selling opportunities deserve attention. At the same time, if bullish formations emerge on lower timeframes, I believe they should be approached cautiously, as trading against such a strong bearish background may not offer the best risk-to-reward ratio. The market has spent an extended period moving in a choppy, saw-tooth pattern near the highs. Technical conditions for a decline were met, and the third wave eventually developed as expected. The primary downside target at the horizontal support level of 1.5784 was reached, although much later than expected and with a deeper decline. Afterward, a pullback toward the broken 1.6060 level occurred, even briefly exceeding it. While the pair has remained stuck in consolidation for nearly two months, I still maintain a bearish outlook and expect further downside movement in the longer term.