EURCAD recently busted through the resistance of its range visible on the 1-hour chart, suggesting that an uptrend is due. Price might still pull back to nearby support areas to gather more bullish energy before heading further north.

The 100 SMA is above the 200 SMA to confirm that the path of least resistance is to the upside or that the climb is more likely to gain traction than to reverse. The gap between the indicators is widening to reflect stronger bullish momentum.

The 38.2% level is close to the broken range top around 1.5300 while the 50% level lines up with the 100 SMA dynamic support at 1.5270. If any of the Fibs hold as support, price could revisit the swing high near the 1.5450 minor psychological mark or go for new highs.

RSI is turning lower from the overbought zone to reflect a return in selling pressure. Similarly stochastic is moving south, so price could follow suit as sellers take over. Both oscillators have plenty of room to move south before indicating oversold conditions.

The Canadian dollar is under downside pressure after risk-off flows picked up on the Fed’s downbeat outlook. The US central bank noted that it will take a long while before the economy recovers from the impact of the pandemic, which suggests that business and consumer activity won’t pick up enough to shore up demand for commodities like oil.

Meanwhile, the euro has enjoyed strong support after the ECB recently increased its stimulus efforts and the German government announced an aid package as well. The European Commission is also working on the EU Recovery Plan, which could mean a huge boost for the region’s economy.

Safe-haven flows are also lifting the shared currency versus its higher-yielding counterparts. There are no major reports due from the euro zone or Canada for the rest of the week.