EUR/CAD Sellers Target Downside as Short-Term Bullish Momentum Fades
Market Overview
The EUR/CAD pair has stalled after a short-term upward movement, as renewed strength in the Canadian dollar puts pressure on the euro. The recent stabilization of oil prices, coupled with improving wholesale trade figures in Canada, has bolstered the loonie’s resilience. Meanwhile, the euro remains vulnerable, facing persistent economic uncertainty across the Eurozone. These contrasting factors have halted the pair’s mid-term bullish momentum, leaving sellers in a more favorable position.
Technical Analysis
On the one-hour chart, EUR/CAD is currently trading in a consolidation phase, oscillating between support at 1.50086 and resistance at 1.50572. This range-bound movement reflects a pullback in bullish momentum, giving sellers an opportunity to capitalize on the market’s hesitation.
If sellers manage to push the price below the 1.50086 support level, a corrective decline towards 1.49954 and 1.49786 is likely. Momentum indicators also support this bearish outlook. The RSI has broken below 50, signaling increased selling pressure, while the MACD is below zero, confirming a bearish divergence between the 12-period and 26-period moving averages.
However, if buyers re-enter the market, a breakout above the 1.50272 resistance level could indicate renewed upside momentum. The bullish trend would only resume if the pair clears the previous high at 1.50572, which would likely open the door to further gains.
Key Technical Levels
- Resistance Levels: 1.50272, 1.50572
- Support Levels: 1.50086, 1.49954, 1.49786
Fundamental Drivers
Today’s key economic events for the Eurozone include reports on consumer and business sentiment, which could influence euro positioning. However, market participants are primarily focused on the ECB’s monetary policy minutes, expected later in the session. Any hawkish or dovish tone in the statement could set the tone for euro movements.
For Canada, the focus will be on the international trade balance report, which may impact the CAD’s direction. If trade figures show an improvement, further CAD strength could weigh on EUR/CAD. Additionally, the market remains attentive to Friday’s Eurozone inflation data, which will provide further clarity on the ECB’s monetary policy outlook.
Conclusion
EUR/CAD is currently trading in a consolidation range, with sellers attempting to push the pair lower as bullish momentum fades. A break below 1.50086 could trigger a corrective move to 1.49786, while buyers need to reclaim 1.50572 to revive the uptrend. The ECB minutes and Canada’s trade data will be key in determining the next directional move.
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