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EUR/CAD Signals Bearish Outlook with a Range Breakout

EUR/CAD has been consolidating as we can see in the 4H chart. 

EUR/CAD 4H Chart 3/2

(click to enlarge)

Throughout February, EUR/CAD traded in a a range between roughly 1.4070 and 1.4340. At the end of the month, we saw price dip below this range support stalling at 1.3950 at the end of last week. 

The breakout opens up a bearish outlook but first we are dealing with a pullback. If price can stay below 1.41, the bearish outlook would still be very clear. Even if price pushes higher, a hold below 1.4150 should maintain the bearish outlook. Above 1.4150, particularly above 1.42, price would be back above the middle of the February range and above the cluster of 4H SMAs, which would signal a false break to the downside, and a possible swing to at least test the 1.4340 resistance.

We should have more confidence of the bearish outlook because the prevailing trend in EUR/CAD was bearish.

EUR/CAD Daily Chart 3/2

(click to enlarge)

When we look at the daily chart, we can see that the market has been consolidating since September. Before that it was bearish. This consolidation first had characteristics of an expanding range, and then it contracted a bit. Or, we can simply say that the expansion was over as price held at 1.45 and failed to reach the previous high around 1.46. This break of the pattern of price action suggests a shift back into the prevailing downtrend. 

In the short-term, the current break to the downside exposes the 1.38 low, with risk of extending lower.