The euro is the best performer today and CAD the laggard. The pair is up more than 100 pips in what could be the start of a short squeeze.
So far, however, EUR/CAD hasn’t been able to close above 1.2500 which is a) the 2010 low close support (now resistance) b) an area of consistent selling interest on the daily chart c) a big round figure.
Alternatively, EUR/CAD appears poised to close above the 55-day moving average, which has been a tricky resistance level. There is also a messy inverted head and shoulders bottom.
Ultimately, the trend remains down but a squeeze higher is probably and could be swift and painful.
Today’s high of 1.2518 is a great line in the sand for the moment. If that breaks, look for a quick long. Then use the squeeze to position for a longer-term short at 1.2750/1.2800.
Alternatively, euro bears might use 1.2518 as a stop.
