Chart: EUR/CAD Long-term Interest Area

I see a manual break and retest situation on the EUR/CAD daily chart!

Will this potential support area hold or will we see a breakout this time?

TradingView EUR/CAD Daily Forex Chart

Crude oil last week supported the commodity-linked loonie higher against most of its currency peers, allowing EUR/CAD to retreat from its highs of 1.5200.

The pair dropped to the 50% Fibonacci retracement level on its last rally seen on the daily time frame. A further correction could reach the 61.8% Fib, which is also around a former resistance area and the uptrend line that has held since last October.

Can the long-term interest zone still contain the losses?

Remember that directional biases and market price volatility conditions are usually driven by fundamentals. If you haven’t done your homework on the Euro and Canadian Dollar yet, then it’s time to check the economic calendar and stay up to date with the daily fundamental news!

The 100 SMA is above the 200 SMA to suggest that the path of least resistance is to the upside or that the uptrend is more likely to resume than reverse. In addition, these moving averages are close to the trend line and S1 (1.4790) to increase its strength as a potential floor.

However, a break below this region and long bearish candlesticks could trigger a longer-term reversal, possibly pulling EUR/CAD further south to S2 (1.4670) or to S3 (1.4450).

Don’t forget that the Bank of Canada (BOC) is lining up its interest rate decision this week, which means the Loonie pairs could see some additional volatility.

No matter how you decide to play this setup, be sure to practice proper risk management and check out our newly launched Forex Correlator!