Looking for another central bank trading event this week?
the BOC decision While the EUR/CAD pair is approaching these correction levels.
If any of these support areas are marked by a Fibonacci retracement tool, the uptrend may resume.
Trade EUR/CAD for one hour Planned by TV
The price has been forming higher lows associated with a short-term ascending trend line which has been holding since late June.
Another test of this potential ground appears to be in play, as EUR/CAD is pulling back from highs near R1 (1.4630).
An easy to use Fibonacci tool shows that the 38.2% level is approaching the minor psychological support at 1.4550, while the 61.8% retracement lines up with the trend line and pivot point (1.4500).
Not only does it coincide with a major psychological level, but it is also near the dynamic inflection point of the 200 SMA and the previous resistance area!
The 100 SMA is well above the 200 SMA to confirm that the support levels are more likely to hold than to be broken. At the same time, the gap between the moving averages is widening to reflect the strength of the bullish momentum.
Stochastic is also heading higher to indicate that bullish sentiment is at play, and that the oscillator has a lot of ground to cover before reversing overbought conditions.
However, EUR/CAD could make its way back to the swing high or higher. Just watch out for a dip below S1 (1.4440) as this may indicate an upward trend reversal.
Of course don’t forget to keep your eyes and ears peeled for any major changes in BoC rhetoric, as a sudden halt or even a “pessimistic rally” could bring some downsides to the Canadian currency.
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