Don’t look now, but this euro pair is within striking distance of its long-term range bottom.
Will support still hold or are we in for a breakdown?
Better keep your eyes on these nearby inflection points!
EUR/CAD 4-hour Forex Chart by TradingView
In our Weekly FX Market Recap, we noted how the Canadian dollar was able to breathe a sigh of relief after U.S. President Trump agreed to a 30-day delay in tariffs.
However, a fresh batch of higher U.S. trade levies on Canada has just been signed, this time targeting steel and aluminum imports.
Rising crude oil prices on account of elevated geopolitical tensions still appear to be keeping the correlated Loonie supported for the time being, but can EUR/CAD still stay within its long-term range?
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 Canadian dollar, then it’s time to check out the economic calendar and stay updated on daily fundamental news!
As you can see from the chart above, EUR/CAD is already inching close to the range support around 1.4725, and this floor has held since December last year. If euro bulls step up to defend this region, keep an eye out for a bounce back up to nearby resistance zones like the pivot point level (1.4880) and 1.4900 major psychological level.
The 100 SMA is above the 200 SMA after all, suggesting that support is more likely to hold than to break. Then again, the pair has fallen below both moving averages, so these could also hold as dynamic resistance levels on rallies.
Sustained selling pressure could see a break below the range support, so look out for a potential drop to the next support zones at S1 (1.4630) then S2 (1.4490) if this happens.
Don’t forget to keep tabs on this week’s set of top-tier news events, as well as any headlines that could impact market sentiment, when taking any trades.