EURCAD has formed higher lows and higher highs, consolidating in a rising wedge formation on its 4-hour chart.

Price seems to have bounced off the resistance at the 1.5250 minor psychological level and could be due for a test of support.

The 100 SMA is above the longer-term 200 SMA so the path of least resistance is to the upside. This could either mean that an upside breakout is due or that the wedge support would keep losses in check. Note that stochastic is indicating overbought conditions and is turning lower to indicate a return in bearish pressure. 

Economic data from the euro zone has been mostly stronger than expected last week but Draghi has stayed cautious in his recent speeches. This suggests that this week’s ECB statement might not contain any major shifts in bias, especially since the flash CPI readings turned out weaker than expected.

Meanwhile the Loonie has still been under selling pressure as oil failed to stage a strong rebound even after the OPEC decided to extend their output deal by nine months. Traders could continue to pay attention to inventories data from the API and EIA to see if the reductions in supply could continue.

By Kate Curtis from Trader’s Way