EURCAD is trending higher inside an ascending channel that’s just forming on its 4-hour time frame. Price just bounced off the top and has broken below the mid-channel area of interest, so a test of support may come soon.

The 100 SMA just crossed above the longer-term 200 SMA to signal that the path of least resistance is to the upside. In other words, the uptrend is more likely to resume than to reverse. The moving averages also appear to be holding as dynamic support for now, but a bearish flag also seems to have formed to signal a continuation of the drop.

RSI is heading south but looks ready to turn up as it closes in on the oversold area. Doing so could encourage buyers to return and lift EURCAD back to the channel top at 1.5200. Stochastic is hovering around the oversold region to signal that bearish pressure is exhausted and that bullish momentum might return.

The euro was dragged lower mostly by concerns on Italy’s debt as the EU once again issued a rejection for their spending plans. Meanwhile, the Italian government has insisted on maintaining its deficit targets while just pledging to put more measures in place to keep spending monitored.

The Loonie was also under pressure on account of risk aversion, weaker crude oil, and resurfacing trade concerns. Still, it managed to outpace the euro for the most part of the week as the shared currency also had Brexit uncertainty to deal with.

Looking ahead, though, it seems that the latest developments in Brexit could unwind the losses in European markets while persistent declines in crude oil could put more weight on the Loonie. Note that, while Saudi Arabia expressed willingness to curb output, other producers like Russia and Iran aren’t on board.