2026-01-08 03:38:00
Don’t look now, but EUR/CAD could be gearing up for a reversal from its downtrend!
Can the pair break above this neckline resistance or will we see a continuation of the slide?
Take a look at these inflection points on the 4-hour time frame.
The oil-related Canadian dollar has been under some selling pressure, as traders continue to ease up on supply jitters stemming from the Venezuela crisis that blew up over the weekend.
Meanwhile, data points from the eurozone have been mixed, as flash CPI readings have fallen short of estimates while final services sector PMI readings have shown green shoots.
Will EUR/CAD break or bounce from this ceiling?
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!
The pair is attempting to pull higher from its drop late last year, forming a double bottom or classic reversal pattern with the neckline around the 1.6200 major psychological mark.
Keep an eye out for candlesticks suggesting that the resistance could hold, possibly sending EUR/CAD back down to nearby support levels at R1 (1.6130) then the pivot point (1.6100) which lines up with a major psychological mark.
On the flip side, long green candles closing above R3 (1.6210) could suggest that a bullish breakout is materializing, possibly setting the stage for further rallies until R4 (1.6240) then R5 (1.6280).
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.
