EURCAD has been moving sideways inside a range visible on its 4-hour chart, finding support at the 1.3400 handle and resistance at the 1.3750 minor psychological mark.
Price is closing in on the top of the range and might be due for another move south. Technical indicators seem to be pointing to resistance keeping gains in check.
The 100 SMA is below the 200 SMA to indicate that the path of least resistance is to the downside or that the ceiling is more likely to hold than to break. This might take EURCAD back down to the bottom of the range or at least until the middle around 1.3650.
Stochastic is still on the move up to show that there is some bullish pressure left, but the oscillator is also nearing the overbought region to reflect exhaustion among buyers. Turning lower would confirm that bearish pressure is about to pick up.
RSI is on the move down to show that buyers are taking a break and letting sellers have the upper hand as well.
EURCAD might take cues from the eurozone flash PMIs up for release next, especially since small declines are eyed.
The French flash manufacturing PMI could fall from 54.6 to 53.9 while the services PMI could drop from 58.3 to 57.6. The German flash manufacturing PMI could decline from 54.8 to 54.0 while the services PMI could fall from 55.0 to 54.6.
Weaker than expected results might mean more downside for the shared currency as it would dash hopes of seeing an ECB hike sooner rather than later. However, it’s also worth noting that Lagarde hinted they’re likely to increase borrowing costs in July.
There are no major reports due from Canada, so the currency might take cues from overall market sentiment. Resurfacing fears of a recession might mean more downside for the higher-yielding commodity currency while a return in risk appetite could spur gains.