The EUR/CAD pair is currently stabilizing around the mid-1.6100s. It has paused after pulling back from a three-week high. Traders are waiting for Canadian employment data to help guide their next moves. Technically, the 1.1615-1.1620 area is a significant obstacle. This area combines a downward trend from 1.6200 and the 100-day Simple Moving Average (SMA). The EUR/CAD is currently between the 100-day SMA at 1.6213 and the 200-day SMA at 1.6019.

MACD and RSI Indicators

The Moving Average Convergence Divergence (MACD) indicator is showing positive momentum, while the Relative Strength Index (RSI) is neutral at 50. If the pair stays above the 200-day SMA at about 1.6020, it could move toward the 1.6215-1.6220 area. Canadian job data significantly affects the Canadian Dollar. The Employment Change figure is crucial because it relates to consumer spending, inflation, and rate decisions from the Bank of Canada. Generally, strong employment data supports the Canadian Dollar, while weak data has the opposite effect. We recall a similar situation back in 2025 when the EUR/CAD was around 1.6150. The market was also waiting for Canadian jobs data and showed a slight upward bias. However, a strong jobs report later caused the pair to dip below its 200-day moving average, which it has struggled to regain.

Canada’s Economic Resilience

Today, the economic outlook is clearer and favors the Canadian Dollar. The December 2025 labor force survey revealed that Canada added 55,000 jobs, far exceeding expectations of 15,000 and reducing the unemployment rate to 5.6%. This economic strength suggests that the Bank of Canada is unlikely to cut interest rates soon. On the other hand, the Eurozone is still struggling, with December 2025 flash PMI data reflecting ongoing contractions in manufacturing. This economic divide indicates that the European Central Bank may adopt a more cautious stance than its Canadian counterpart, supporting a lower EUR/CAD exchange rate in the near future. Given this context, there are opportunities for strategies that benefit from a decline or stagnation in the EUR/CAD. Derivative traders might consider buying put options with strike prices below the current market to target a move towards the 1.5800 level seen last year. This offers a clear bet on continued Canadian economic strength. For those looking to earn income with a less aggressive approach, selling call spreads above the previous 1.6100 resistance could also be effective. This would be profitable if the pair moves sideways or trends lower, taking advantage of strong fundamental challenges. The upside appears limited, while the overall trend is downward. Create your live VT Markets account and start trading now.

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