EUR/CAD Extends Recovery as Oil Slide Hurts Loonie

Traders' Opinions

Summary:

EUR/CAD climbed back above 1.6200 on Thursday as resilient Eurozone labor market data supported the Euro, while falling oil prices continued to weigh on the commodity-linked Canadian Dollar. Markets remain focused on the diverging policy outlook between the ECB and the Bank of Canada.

BUY EURCAD

EXP

TRADING

1.62147

Entry Price

1.64050

1.61300

1.62119 +0.00035 +0.02%

0.0

Pips

Flat

1.61300

Exit Price

1.62147

Entry Price

1.64050

The Euro strengthened against the Canadian Dollar during Thursday's European session, with EUR/CAD climbing toward 1.6200 after snapping a two-day losing streak. The move was driven by resilient Eurozone labor market data and renewed weakness in crude oil prices, which continued to pressure the commodity-linked Canadian Dollar.

Fresh data showed the Eurozone unemployment rate held steady at 6.2% in May, beating expectations for a slight increase to 6.3%. Although the report was not strong enough to materially shift European Central Bank policy expectations, it reinforced confidence that the region's labor market remains resilient despite slowing inflation.

ECB policymakers, however, continued to send mixed signals. Belgian central bank chief Pierre Wunsch argued against further policy tightening, suggesting inflation risks are increasingly tilted to the downside ahead of the July meeting. Meanwhile, Governing Council member Martin Kocher maintained that another rate hike remains possible if wage growth keeps inflation elevated.

On the Canadian side, the decline in global oil prices remained the dominant driver. Crude extended recent losses as shipping through the Strait of Hormuz continued to recover and diplomatic progress between Washington and Tehran eased concerns over potential supply disruptions. Lower energy prices typically weigh on the Canadian Dollar given Canada's heavy reliance on oil exports.

Still, Canada's domestic economy has shown encouraging signs of stabilization. Statistics Canada reported that the economy expanded 0.5% in April, while preliminary estimates point to another 0.1% increase in May, reducing fears of a deeper slowdown.

Technical Analysis

EUR/CAD remains supported by a bullish structure on the 4-hour chart, with price trading near 1.6212 after rebounding from the rising trendline and the 1.6145–1.6170 Fibonacci support zone. The pair continues to form higher lows, which suggests buyers are still defending the broader uptrend.

The latest recovery is technically important because price respected the 50%–61.8% retracement area, a zone that often acts as a continuation base in bullish structures. As long as EUR/CAD holds above 1.6145, the current pullback remains corrective rather than bearish.

On the upside, immediate resistance sits around 1.6270, which marks the recent swing high. A sustained break above this level would likely confirm renewed bullish momentum and open the door toward 1.6338, followed by 1.6405, matching the projected upside path on the chart.

On the downside, a break below 1.6145 would weaken the bullish setup and expose 1.6115, followed by 1.6075. A deeper move below those levels would suggest a broader correction is underway.

Momentum remains constructive, with price recovering from trendline support instead of breaking below it. This supports the view that buyers remain in control while the market holds above the key Fibonacci zone.

TRADE RECOMMENDATION

BUY EUR/CAD

ENTRY PRICE: 1.6215

STOP LOSS: 1.6130

TAKE PROFIT : 1.6405

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