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  • EUR/CAD is in the throes of a significant upside correction.  
  • Bears need to clear prior highs and the 4-hour 10 SMA.  

EUR/CAD has firmed within a solid upside correction at the start of the week which is invalidating prospects of a nearer-term downside extension of the weekly bearish trend.  

The following illustrates the compelling case for a deeper test of supply prior to a bearish continuation.  

Weekly chart

The weekly wick is expected to be filled in on the lower time frames but the upside correction prospects are compelling all the way towards a 50% mean reversion of the weekly bearish impulse that meets with prior lows.  

Daily chart

That being said, from a daily perspective, the bulls don’t need to look so far for a prior support structure that has a confluence with the 61.8% Fibonacci retracement.  

4-hour chart

EUR/CAD has moved higher within the corrective motion to now stand above the 10-moving average on the 4-hour chart.  

The rally has solidified a support structure from which bulls can target prior lows.

Only on a break below the 10-SMA and newly formed support structure will the environment turn bearish.