The EUR/CAD currency pair has shown some upward movement, trading at approximately 1.5025 in the early European session on Wednesday. This growth reflects a positive outlook, as the pair remains above the 100-day Exponential Moving Average (EMA), bolstered by a bullish position in the Relative Strength Index (RSI), which is currently hovering around 59.50. This technical setup suggests that further price appreciation is likely.
In the broader economic context, expectations are building around a potential cut in the Bank of Canada’s key interest rate by 25 basis points during its upcoming policy meeting. Concerns surrounding the tariff policies proposed by the US administration may further pressure the Canadian Dollar (CAD). Recently, President Trump announced plans to implement a substantial 25% tariff on goods from Canada and Mexico starting February 1, which could impact CAD’s performance against the EURO (EUR).
From a technical analysis perspective, the immediate resistance level for EUR/CAD is anticipated in the 1.5095 to 1.5100 range, aligning with the upper boundary of the Bollinger Band as well as being a notable psychological threshold. If the pair successfully breaks past this resistance, it could aim for the next significant target at 1.5130, which corresponds to the high set on January 27. A breakthrough here could pave the way for a potential rally towards 1.5172, marking the peak observed on November 1, 2024.
Conversely, the support levels are equally important. The initial support is positioned at 1.4936, the low recorded on January 23. Additionally, the critical level to monitor includes the 100-day EMA at 1.4905, while a further downside level lies at 1.4760, corresponding to the low seen on January 2. These levels will be essential for determining the future direction of EUR/CAD in the coming sessions.
