EUR/CAD appears to have completed a reversal chart pattern and is currently testing its neckline.
Will it break out and confirm a new trend soon?
Better keep your eyes on this support zone on the 4-hour time frame!
EUR/CAD 4-hour Forex Chart by TradingView
Improving economic data from Canada appear to be weighing on easing expectations for the Bank of Canada (BOC), giving the Loonie a fighting chance against its forex counterparts.
EUR/CAD slid back down to test its head and shoulders neckline support around the 1.6200 major psychological mark, and a break lower could signal that a downtrend is in the works.
Are more sellers about to hop in from here?
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 Canadian Dollar and the Euro, then it’s time to check out the economic calendar and stay updated on daily fundamental news!
There’s not much in the way of top-tier catalysts from Canada for the remainder of the week while the eurozone has the flash PMI releases to look forward to on Friday.
Keep an eye out for stronger than expected results that could trigger a bounce off the floor, potentially lifting EUR/CAD back up to the bullish targets at the pivot point (1.6280) then R1 (1.6360) near its October highs.
On the other hand, a pickup in bearish pressure could lead to a convincing move below the neckline support, possibly taking EUR/CAD down to S2 (1.6130) then S3 (1.6070) next.
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.
