Looking for another central bank event to trade this week?
The BOC decision is coming up while EUR/CAD is closing in on these correction levels.
If any of these support areas marked by the Fibonacci retracement tool hold, the uptrend could resume.
EUR/CAD 1-hour Forex Chart by TV
Price has been forming higher lows connected by a short-term ascending trend line that’s been holding since late June.
Another test of this potential floor seems to be underway, as EUR/CAD is retreating from the highs near R1 (1.4630).
The handy-dandy Fib tool shows that the 38.2% level is near the 1.4550 minor psychological support 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’s also right around the 200 SMA dynamic inflection point and former resistance zone!
The 100 SMA is way above the 200 SMA to confirm that support levels are more likely to hold than to break. At the same time, the gap between the moving averages is widening to reflect strengthening bullish momentum.
Stochastic is also heading higher to indicate that bullish vibes are in play, and the oscillator has plenty of ground to cover before reflecting overbought conditions.
With that, EUR/CAD could make its way back up to the swing high or even higher. Just watch out for a dip below S1 (1.4440) since this might signal a reversal from the uptrend.
Of course don’t forget to keep your eyes and ears peeled for any major changes in BOC rhetoric, as a surprise pause or even a “dovish hike” could still bring some downside for the Canadian currency.
This content is strictly for informational purposes only and does not constitute as investment advice. Trading any financial market involves risk. Please read our Risk Disclosure to make sure you understand the risks involved.
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