EURCAD Ascending Trend Correction Levels

EURCAD has been trending higher since mid-May, with the pair’s rising lows connected by an ascending trend line that has been guiding the climb.

The pair surged to a swing high near the 1.6267 level before pulling back, and the pair is currently trading around 1.6187 as it retreats toward key Fibonacci retracement levels that could attract a fresh wave of buyers.

The Fibonacci retracement tool drawn from the 1.6036 swing low to the 1.6267 high shows where buyers could be waiting to join in. The 38.2% Fib is at 1.6178, which price is already testing. A deeper correction could reach the 50% level at 1.6151, followed by the 61.8% Fib at 1.6124, which coincides closely with the ascending trend line and could serve as the line in the sand for a bullish pullback.

If any of these levels hold as a floor, EUR/CAD could resume the rally back toward the swing high or beyond. Long red candles closing below the trend line, on the other hand, could be indicative of a reversal soon.

The 100 SMA is above the 200 SMA to confirm that the path of least resistance is to the upside, or that the climb is more likely to gain traction than to reverse. Both moving averages are sloping higher beneath current price and could provide additional dynamic support on deeper dips, reinforcing the ascending trend line as a key area of interest for buyers.

Stochastic is heading south and approaching the oversold region, reflecting growing selling pressure during the pullback. Once the oscillator dips into oversold territory and turns higher, that could be the signal that buyers are ready to step back in.

RSI is also sliding lower with room to fall before hitting oversold levels, suggesting the correction could extend slightly before finding its footing. A turn higher in the oscillator from lower levels would add further weight to the case for a bullish resumption toward fresh highs.