EURCAD has been trading inside a longer-term range between support at 1.6100 and resistance at 1.6300, and price is currently testing the bottom of this consolidation area.

A strong bounce off this floor could set the stage for another move back to the range top, while a break lower would signal the start of a downtrend.

The pair appears to be finding support around the 1.6100 major psychological mark, which has held as a floor on multiple occasions over the past few months. If this level continues to attract buyers, EURCAD could stage a rally back to the middle of the range near 1.6200 or even the resistance at 1.6300.

However, a clean break below the range support would confirm that sellers have gained control and could trigger a move toward the next area of interest around 1.6000 or lower. This would likely require sustained bearish momentum and supportive fundamental drivers.

The 100 SMA is below the 200 SMA to indicate that the path of least resistance is to the downside or that the selloff is more likely to gain traction than to reverse. The gap between the indicators is widening to reflect strengthening bearish pressure, which means that a break of support could lead to a sharp decline.

Stochastic is pulling up from the oversold region to show that sellers are taking a break and that buyers might be ready to defend support. The oscillator has plenty of room to climb before reaching the overbought zone, so there could be enough momentum for a bounce back to range resistance.

RSI is also turning higher from oversold territory, suggesting that bulls are attempting to regain control. However, the oscillator is still hovering in the lower half of the range, which means that bearish pressure could return if support fails to hold.

EURCAD is likely to take cues from oil price movements and interest rate expectations from both the ECB and the Bank of Canada.