EUR/CAD has been pacing back and forth between support at the 1.6100 major psychological mark and resistance around 1.6300.
Is it due for another bounce this time?
Better keep tabs on these inflection points on the 4-hour time frame!
EUR/CAD 4-hour Forex Chart Faster with TradingView
Weakening inflationary pressures in the eurozone have dragged EUR/CAD to the bottom of its range earlier this week, as traders braced for a potentially dovish ECB decision.
However, the central bank still maintained interest rates as expected while assessing that the region’s economy remains resilient and that inflation should stabilize at its 2% target soon, allowing the pair to hold steady above support.
Is it due for a rally to resistance next?
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!
A bit of consolidation is taking place around the range support, suggesting that bulls and bears are still battling it out. Traders are likely holding out ahead of Canada’s January employment report, which could set the tone for future BOC decisions.
A bounce off current levels could lift EUR/CAD to the middle of the range at the pivot point (1.6200) and a major psychological resistance. Look out for stronger upside momentum that could take it all the way up to the top near R1 (1.6330).
On the other hand, long red candlesticks closing below the floor could point to a bearish breakdown and a selloff until the next potential support at S1 (1.6010) or lower.
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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