EUR/CAD appears to be in the midst of a correction, approaching a key area of interest. The big question remains: will this level hold?
On the 4-hour chart, several inflection points are worth monitoring as the pair navigates this critical zone. Keep an eye on how price action unfolds in this area to determine potential continuation or reversal scenarios.
EUR/CAD 4-Hour Outlook: Testing Key Resistance Levels
European markets responded bearishly to the recent U.S. elections, dragging EUR/CAD below the strong 1.4900 psychological support zone. However, this week’s return of risk-off sentiment has pressured the higher-yielding Canadian dollar, enabling the pair to climb back toward a key area of interest.
The question now: will this former support zone, aligning with the 38.2% Fibonacci retracement level, hold as resistance? If euro sellers return at this level, EUR/CAD could slide back to the swing low near S1 (1.4730) or even test the next support at S2 (1.4610).
A deeper correction might reach the 50% Fib level around R1 (1.4950) or the 61.8% level near the 1.5000 mark. A sustained break above these levels could signal a potential reversal, with upside targets at R2 (1.5040) and R3 (1.5160), just below the recent swing high.
Traders should also monitor Canada’s upcoming CPI report, which could trigger heightened volatility for CAD pairs. Stay updated on key economic releases and fundamentals driving the euro and Canadian dollar, and ensure proper risk management when placing trades!
