EUR/CAD has been cruising higher with rising lows connected by an ascending trend line.
Is it due for another support test soon?
Check out these potential correction levels on the 4-hour chart!
EUR/CAD: 4-hour
EUR/CAD 4-hour Forex Chart Faster with TradingView
Falling crude oil prices on account of easing geopolitical tensions over the past weeks have been weighing on the correlated Loonie, as global supply concerns are fading on hopes that the Strait of Hormuz could soon reopen.
Meanwhile, the European Central Bank (ECB) just hiked interest rates last week in order to combat rising inflationary pressures.
Are we about to see further upside on EUR/CAD?
The pair appears to be stalling at the R1 (1.6240) swing high, possibly leading to a quick correction to the nearby Fibonacci retracement levels.Remember that directional biases and volatility conditions in market price are typically driven by fundamentals. If you haven’t yet done your homework on the euro and the Canadian dollar, then it’s time to check out the economic calendar and stay updated on daily fundamental news!
A shallow pullback could find support at the 38.2% Fib that lines up with an area of interest, while a larger correction could reach the 50% Fib that coincides with the 1.6150 minor psychological mark and trend line.
Keep your eyes peeled for reversal candlesticks at any of these support areas, as a bounce could take EUR/CAD back up to the swing high or to fresh upside targets near R2 (1.6300).
On the other hand, long bearish candles closing below the 61.8% Fib and trend line support could suggest that a reversal from the uptrend is in order.
Whichever bias you end up trading, don’t forget to practice proper risk management and stay aware of top-tier catalysts that could influence overall market sentiment!
This article mentions that falling crude oil prices have been weighing on the Canadian dollar, a relationship that may not be immediately obvious to newer traders. Premium members can read our lesson:
📖 How Oil Moves with USD/CAD, USD/NOK, and CAD/JPY
Reading this helps you understand why oil prices influence the Loonie, how that relationship plays out across oil-linked currency pairs, and how traders use those connections to confirm market moves.
And if you’re not a Premium subscriber yet, now’s a good time to sign up.
With Babypips Premium, you get full access to School of Pipsology lessons that help you understand not just what the chart is showing, but the commodity dynamics driving the currencies behind the move.
