Missed the range breakdown on EUR/CAD?
The pair seems to be in the middle of a correction to the area of interest, but will it keep holding?
Take a look at these inflection points I’m watching on the 4-hour time frame:
EUR/CAD 4-hour Forex Chart by TradingView
European markets had a mostly bearish reaction to the U.S. elections earlier this month, dragging EUR/CAD below the strong support zone around the 1.4900 major psychological mark.
However, a return in risk-off flows this week also forced the higher-yielding Canadian dollar to take hits, allowing the pair to pull back up to the area of interest.
Will it hold as resistance this time?
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!
The former support zone coincides with the 38.2% Fibonacci retracement level, which could be enough to attract euro sellers and take the pair back down to the swing low near S1 (1.4730) or to the next potential floor at S2 (1.4610).
A larger correction could still reach the 50% Fib near the R1 (1.4950) minor psychological mark or the 61.8% level closer to the 1.5000 major psychological handle, but a break above these levels could pave the way for a move back to the upside targets at R2 (1.5040) then R3 (1.5160) just below the swing high.
Don’t forget that Canada has its CPI report up for release and could spur additional volatility for CAD pairs.
As always, watch out for other top-tier catalysts that could impact overall market sentiment, and make sure you practice proper position sizing when taking any trades!
