EUR/CAD Sellers Target Key Weekly Support Amid Weak Euro Sentiment

Market Overview

The EUR/CAD pair has faced sustained selling pressure this week, driven by diverging conditions in Europe and Canada. The Canadian dollar has found support from rising oil prices, benefiting from improved energy market sentiment. On the other hand, the euro remains under pressure amid fragile economic and geopolitical conditions across Europe, which have further weakened its standing against the Canadian dollar. As a result, EUR/CAD is on track for its third consecutive day of losses, with sellers pushing the price towards a key weekly support level.

Technical Analysis

On the daily chart, EUR/CAD continues its downward movement after breaking out of a mild descending channel. Sellers have driven the price to the one-week low of 1.47112, reinforcing the current bearish sentiment. If sellers succeed in breaking through this key level, further downside targets are likely, with immediate supports at 1.46626, 1.46372, and ultimately at 1.46007. The presence of divergence between the Bollinger Bands, coupled with momentum oscillators pointing lower, clearly indicates that bearish forces dominate the market for the time being.

However, if the price finds support at 1.47112 and bounces higher, resistance levels will come into play at 1.47795, followed by the major ceiling at 1.48900. A sustained break above 1.48900 would shift the broader outlook to bullish, signalling the potential end of the current downtrend.

Oscillators Confirmation

Momentum indicators confirm the bearish market bias. The Relative Strength Index (RSI) is currently at 42.5, highlighting steady selling pressure, though it has yet to enter oversold territory. This indicates there may still be room for the downtrend to continue. The Moving Average Convergence Divergence (MACD) also remains in negative territory, with the signal line trending lower, further supporting the bearish outlook. Additionally, the pair’s position below both the 34-period and 100-period moving averages indicates that sellers maintain control over the short-term price direction.

Key Support and Resistance Levels

Resistance Levels:

• 1.48900: A break above here would indicate a bullish reversal.
• 1.47795: Immediate resistance if buyers attempt a recovery.

Support Levels:

• 1.47112: Current support, key for maintaining short-term bearish bias.
• 1.46626: First downside target if selling pressure persists.
• 1.46372: Secondary support, in line with the current downtrend.
• 1.46007: Key level to monitor in case of continued bearish movement.

Key Events to Watch

Investors will be closely watching Canadian inflation data related to raw material prices, which is expected to show a decline of 1.5% in October. Should the data surpass expectations, it could strengthen the Canadian dollar further, amplifying the downside pressure on EUR/CAD. Meanwhile, in Europe, speeches from ECB Governing Council members Elderson and Lane are scheduled, which could introduce some volatility for the euro. Markets will be listening for any signals regarding the direction of monetary policy, particularly given the recent weakness in European economic data.

Conclusion

EUR/CAD remains under considerable bearish pressure, with sellers targeting key weekly support at 1.47112. A break below this level could pave the way for further downside towards 1.46626 and beyond. However, a bounce above resistance at 1.47795 would indicate a potential shift towards a more positive outlook for the pair.