If you’ve just tuned in, you should know that crude oil prices grabbed a few headlines earlier today.
U.S. crude oil prices recently flirted with the $95.00 levels, which brought the possibility of the Black Crack hitting the $100 mark on the table.
There were no new catalysts for the commodity but there were trend players who continued to price in the tight global supply and optimistic demand prospects.
EUR/CAD 1-Hour Forex Charts by TV
Meanwhile, reports from Germany and Spain showed that inflation remains stubbornly high in the Eurozone despite the ECB’s tightening efforts. The prospect of the ECB needing further rate hikes is pushing EUR higher across the board.
Will today’s EUR strength push EUR/CAD to attractive downtrend pullback opportunities?
We’re looking at the 1.4250 minor psychological level that lines up with the 50% Fibonacci retracement of this week’s downswing as well as a support zone that held on Monday.
More conservative EUR sellers can also look at the 1.4275 area that’s much closer to the trend line and 100 SMA resistance levels in the 1-hour time frame.
Basically, look at the 1.4250 – 1.4275 area for a potential rejection if EUR continues to strengthen in the next trading sessions.
Because unless we see new catalysts that weaken the tight supply/strong global demand narrative for crude oil, USOIL can continue to trade higher and take CAD with it.
This may lead to EUR/CAD extending its weeks-long downtrend and hitting the 1.4100 or 1.4000 areas of interest in the next few days.
Not convinced that EUR can jump high enough to hit the attractive sell zones? That’s alright, you can also consider shorting at shallower pullback levels or at new EUR/CAD lows.
Whichever entry strategy you choose to play, make sure you’re using stop losses and tight risk management principles so you can live to trade another day!
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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