EURCAD Forming Bullish ContinuationEURCAD has recently respected a key demand zone and is now beginning to show early signs of bullish continuation. After a clean breakout above the 1.5900 resistance level earlier this month, price retested this structure and held strongly, creating a textbook bullish rejection wick. This price behavior suggests the pair is gearing up for another impulsive leg to the upside. I'm watching for follow-through momentum targeting the 1.6390–1.6400 zone in the coming weeks, aligning with the risk-to-reward setup visible on the chart.
From a fundamental perspective, the euro remains relatively supported following recent ECB comments signaling a more patient stance on future rate cuts. While inflation in the Eurozone has shown some signs of easing, policymakers remain cautious, especially with energy prices fluctuating again. On the other side, the Canadian dollar has been under pressure due to weaker-than-expected domestic growth and the Bank of Canada’s more dovish tone. Crude oil, which typically supports CAD, has been consolidating with no strong bullish drive lately, limiting CAD’s upside potential.
Technically, the current structure favors bullish continuation. The clean rejection from the previous resistance-turned-support, combined with bullish price action forming a higher low, reinforces the bullish setup. As long as the 1.5900 zone holds, this remains a high-probability long trade setup with potential to deliver strong profits in alignment with the trend.
Watch for daily closures above 1.6000 to confirm the next leg higher. Momentum indicators are flattening, and with liquidity sweeping both sides recently, it’s primed for a move. EURCAD remains on my radar for a swing buy opportunity, with the setup offering excellent technical confluence and favorable fundamental backing.
