Price Action Holds at Fibonacci and Moving Average Confluence

Economic

Forex

Summary:

This zone represents a key structural area because it aligns tightly with the 0.50 Fibonacci retracement level, suggesting that the price could readily resume its broader bullish momentum.

BUY EURCAD

EXP

TRADING

1.61718

Entry Price

1.62680

1.61000

1.61514 -0.00200 -0.12%

0.0

Pips

Flat

1.61000

Exit Price

1.61718

Entry Price

1.62680

Eurozone business activity remained in contraction territory during June, with the flash Composite PMI printing at 49.5 despite a minor increase. Price indices fell on the month but continue to run well above the neutral 50-point threshold, particularly within the manufacturing sector, keeping upward price pressures elevated when compared to February levels before the onset of the war shock in Iran.

The Eurozone Composite PMI Output Index rose by 1.0 point to 48.5, beating both our internal expectations and the market consensus, driven mainly by the services sector while manufacturing output remained virtually unchanged. Commenting on these conditions, ECB Governing Council member Boris Vujčić stated on Tuesday that Eurozone economic growth has proven to be more resilient against supply shocks than people originally expected. Meanwhile, ECB Chief Economist Philip Lane noted that the central bank must stay alert to risks on both sides of the outlook and warned that higher energy prices are expected to keep inflation well above the official target until the first half of 2027. Statistically, the Eurozone composite input price index fell by 5.2 points to 64.7—though it remains 5.7 points above February figures—and the composite output price index decreased by 1.7 points to 55.4, which sits 2.3 points higher than in February. In contrast, the preliminary flash HCOB PMI data for the Eurozone beat expectations, offering some near-term support to the Euro (EUR). The Composite PMI rose to 49.5 from 48.5, the Services PMI improved to 48.9 from 47.7, while the Manufacturing PMI ticked slightly lower to 51.3 from 51.6.

On the other side of the pair, Canadian inflation data reflected a fresh acceleration in price pressures. The Consumer Price Index (CPI) increased by 3.2% year-over-year in May, coming in above both the 2.8% recorded in April and market expectations, which pointed to a 3.0% print. On a month-over-month basis, inflation advanced by 1.0%. Core inflation also displayed signs of underlying strength. The Bank of Canada’s (BoC) preferred core measure, which leaves out volatile components like food and energy, increased by 2.2% compared to the same period last year and recorded a monthly gain of 0.6%. Other key indicators tracked by the BoC reinforced this trend, as the Common CPI rose to 2.7% from 2.5%, while the Trimmed CPI held steady at 2.0% and the Median CPI remained stable at 2.1%. Taken together, these metrics suggest that underlying inflationary pressures remain persistent and indicate that the disinflation process seen in previous months has lost momentum for the time being. Price Action Holds at Fibonacci and Moving Average Confluence_1

Price Action Holds at Fibonacci and Moving Average Confluence_1

Technical Analysis

From a chart perspective, EUR/CAD has executed a downward pullback following a strong bullish impulse that reached a local high of 1.6268. From this peak, the price retraced to the 1.6150 level, a zone where the 100-period Moving Average is currently tracking closely at 1.6157, while the 200-period Moving Average runs lower down at 1.6100. Upon touching the 100-period moving average line, the price action showed an immediate upward reaction. This zone represents a key structural area because it aligns tightly with the 0.50 Fibonacci retracement level, suggesting that the price could readily resume its broader bullish momentum to go test the previous local high resistance at 1.6268.

A review of the oscillator section provides secondary cross-verification for this potential upward turn. The Relative Strength Index (RSI) is currently hovering at the 38 level, moving close to oversold parameters. At the same time, hidden bullish divergences are beginning to appear on the chart, indicating that buyers could start accumulating long positions once again.

Concurrently, the MACD indicator is printing a bearish histogram that is starting to lose its downward depth, while its signal lines are running just underneath the neutral zero line. Inside this setup, a confirmed bullish crossover of both the histogram and the signal lines back into positive territory would provide solid validation for the trend resumption, keeping the path of least resistance directed upward.

Trading Recommendations

Trading direction: Buy

Entry price: 1.6170

Target price: 1.6268

Stop loss: 1.6100

Validity: Jul 03, 2026 15:00:00

Risk Warnings and Disclaimers

You understand and acknowledge that there is a high degree of risk involved in trading. Following any strategies or investment methods may lead to potential losses. The content on the site is provided by our contributors and analysts for information purposes only. You are solely responsible for determining whether any trading assets, securities, strategy, or any other product is suitable for investing based on your own investment objectives and financial situation.

Risk Disclosure

The risk of loss in trading financial instruments such as stocks, FX, commodities, futures, bonds, ETFs and crypto can be substantial. You may sustain a total loss of the funds that you deposit with your broker. Therefore, you should carefully consider whether such trading is suitable for you in light of your circumstances and financial resources.

No decision to invest should be made without thoroughly conducting due diligence by yourself or consulting with your financial advisors. Our web content might not suit you since we don't know your financial conditions and investment needs. Our financial information might have latency or contain inaccuracy, so you should be fully responsible for any of your trading and investment decisions. The company will not be responsible for your capital loss.

Without getting permission from the website, you are not allowed to copy the website's graphics, texts, or trademarks. Intellectual property rights in the content or data incorporated into this website belong to its providers and exchange merchants.

Recent Searches

Top Searches

Markets

Analysis

User

24/7

Economic Calendar

Education

Data

Price Action Holds at Fibonacci and Moving Average Confluence

Technical Analysis

Risk Disclosure