EURCAD has formed higher lows that can be connected by a rising trend line on the 4-hour chart. Price recently busted through near-term resistance at the 1.5400 handle and rallied close to 1.5550 before pulling back.

Using the Fibonacci retracement tool on this move shows that the 50% to 61.8% levels span the broken resistance, which might now hold as support. The 61.8% level is also close to the trend line around the 1.5350 minor psychological mark.

The 100 SMA is above the 200 SMA to confirm that the path of least resistance is to the upside or that the trend is more likely to resume than to reverse. The 100 SMA dynamic support is near the 50% Fib to add to its strength as a floor while the 200 SMA coincides with the trend line.

RSI is still on the move down to reflect the presence of selling pressure, which could carry on until oversold conditions are indicated. Stochastic is also on its way down but dipping into the oversold region to suggest that sellers might need to take a break and let buyers take over. If any of the Fibs hold as support, EURCAD could bounce back to the swing high or higher.

The ECB is scheduled to announce its monetary policy decision today but no actual changes are expected. Any form of optimism from policymakers could be bullish for the shared currency, especially since traders have been paying attention to improvements in leading indicators.

Meanwhile, the Canadian dollar could take cues from crude oil next as the commodity could take hits from the OPEC allies’ indications that they could ease up on supply restrictions. This could mean an influx of the commodity in the markets, which would drive down its price. For now, the commodity remains supported as the EIA report printed a larger than expected draw in stockpiles.