EUR/CAD is struggling to break through its moving average resistance.
Could this keep the pair stuck in its downtrend before it runs into the top of the pattern?
Let’s check out the daily time frame:
EUR/CAD Daily Forex Chart by TradingView
The euro has seen mixed price action so far this week, acting as a regional safe haven at times while also trading like a risk currency against other counterparts.
The Canadian dollar has not found much traction either, with the oil-linked currency showing uneven moves despite firmer oil prices and an improvement in overall risk sentiment.
With Euro Area PMI reports due today, could EUR/CAD finally see more directional price action?
Remember that directional biases and volatility conditions in market price are typically driven by fundamentals. If you haven’t yet done your fundie 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!
EUR/CAD has been printing lower highs and lower lows since October, though price action has leaned slightly more bullish so far this year.
Problem is, the pair has struggled to break above the daily 100 SMA, a level that could attract renewed selling pressure and extend the downtrend even before price reaches descending channel resistance near the 1.6250 area.
Watch for long bearish wicks and red candlesticks around this zone, which could drag EUR/CAD back toward the 1.6100 prior inflection point, if not the 1.6000 major psychological handle.
On the other hand, sustained green candlesticks and a clean hold above the 100 SMA could point to stronger bullish demand, opening the door for a move toward the R1 area near 1.6262, closer to the top of the descending channel.
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.
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