EURCAD is still trending lower inside a descending channel on its 1-hour time frame. Price looks prime for another test of the resistance at the 1.5125 area.

The 100 SMA is below the longer-term 200 SMA to indicate that the path of least resistance is to the downside. In other words, the downtrend is more likely to gain traction than to reverse. Then again, price has climbed above the 100 SMA dynamic inflection point as an early indication of bullish pressure. The 200 SMA is just above the channel resistance to add to its strength as a ceiling.

RSI is already pointing down to indicate that sellers are ready to return. This oscillator has plenty of ground to cover before hitting oversold levels, which means that bears could stay in control for much longer. Stochastic is pointing up but also closing in on the overbought zone to confirm exhaustion among buyers. Turning lower could lead to a return in sellers.

In that case, price could head back to the bottom of the channel around the 1.5000 major psychological mark or at least until the middle at the 1.5050 minor psychological level.

The euro is waiting for the release of the flash PMI readings from Germany and France as these leading indicators would provide the earliest signals of whether or not the region’s slowdown could worsen. This comes ahead of the ECB policy statement, which should give a bit more context.

Recall that Draghi already acknowledged in his speech last week that the slowdown could last longer than initially expected but assured that this won’t lead to a recession. More words of caution, combined with another downbeat set of PMI results, could drive the euro lower against its peers.

Meanwhile, the Loonie has been enjoying some support versus its other rivals on account of stronger crude oil prices.