Summary
- Resistance Levels: Key resistance is observed at 1.5700, with a significant psychological barrier around 1.5800. A breakout above these levels could target 1.5854 and 1.5963, aligning with Fibonacci extensions and previous highs.
- Support Levels: Immediate support is near 1.5500. A breach below this level may lead to a decline towards 1.5300, potentially testing the 200-day moving average.
- Technical Indicators: The Relative Strength Index (RSI) is at 47.6, indicating neutral momentum. The Moving Average Convergence Divergence (MACD) is slightly positive, suggesting a mild bullish bias.
Fundamental Drivers
- Eurozone Economic Indicators: The European Central Bank (ECB) has maintained a cautious stance on monetary policy, with inflationary pressures remaining a concern. Recent data indicates a contraction in Eurozone business activity, with the composite Purchasing Managers' Index falling to 49.5 in May.
- Canadian Economic Outlook: The Bank of Canada (BoC) has adopted a more dovish approach, with recent comments suggesting a preference for accommodative monetary policy to support economic growth.
Short-Term Outlook
The EURCAD pair is trading within a consolidation range, with the euro facing resistance near 1.5700 and support around 1.5500. A breakout above 1.5700 could signal a continuation of the upward trend, while a drop below 1.5500 may indicate a bearish reversal. Traders should monitor upcoming economic data releases and central bank communications for further direction.
EURCAD – H4 Timeframe
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Following the recent bullish double break of structure on the 4-hour timeframe chart of EURCAD, the tone is set for a bullish expectation. The confluence of the two support trendlines helps confirm the bullish sentiment, and the highlighted demand zone serves as the Point of Interest for a bullish entry.
Analyst's Expectations:
Direction: Bullish
Target- 1.57780
Invalidation- 1.54785
CONCLUSION
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