Will we see further consolidation on EUR/CAD?
The pair appears to be finding a ceiling at the top of its range once more, possibly setting its sights lower.
Take a look at these near-term inflection points.
EUR/CAD 4-hour Forex Chart by TradingView
The lack of major catalysts from both the eurozone and Canada seems to be keeping EUR/CAD inside its range that’s been holding for nearly a month already.
The pair has been keeping its head above support near S1 (1.6170) and is currently testing resistance near R1 (1.6310) and looks ready to head back down again.
Or will we see a break higher?
Remember that directional biases and volatility conditions in market price are typically driven by fundamentals. If you haven’t yet done your homework on the euro and the Canadian dollar, then it’s time to check out the economic calendar and stay updated on daily fundamental news!
Moving averages seem to be hinting at further downside, as the 100 SMA is below the 200 SMA to reflect bearish pressure. However, the gap between the indicators is narrowing to suggest that a bullish crossover is possible.
If that happens, EUR/CAD could make another test of the range resistance or perhaps attempt a break higher to the next upside target at R2 (1.6380) and beyond.
On the other hand, a continuation of the selloff could take price back down to the area of interest at the pivot point (1.6240) or all the way back down to the bottom of the range.
Just be sure to keep an eye out for preliminary CPI readings from the eurozone’s top economies, as well as potential profit-taking ahead of the long weekend, when trading this one.
Whichever bias you end up trading, don’t forget to practice proper risk management and stay aware of top-tier catalysts that could influence overall market sentiment!
Disclaimer:
Please be aware that the technical analysis content provided herein is for informational and educational purposes only. It should not be construed as trading advice or a suggestion of any specific directional bias. Technical analysis is just one aspect of a comprehensive trading strategy. The technical setups discussed are intended to highlight potential areas of interest that other traders may be observing. Ultimately, all trading decisions, risk management strategies, and their resulting outcomes are the sole responsibility of each individual trader. Please trade responsibly.
