The EUR/CAD pair held steady at around 1.6225 during early trading in Europe on Thursday. The recent resignation of French Prime Minister Sebastien Lecornu could impact the Euro’s value against the Canadian Dollar. From a technical viewpoint, the EUR/CAD shows a positive trend on the daily chart, remaining above the 100-day Exponential Moving Average (EMA). The 14-day Relative Strength Index (RSI) is neutral, indicating possible consolidation in the short term. Key resistance for the pair is at 1.6266. It may have the potential to rise to 1.6350 and even reach the 1.6395-1.6400 range, which aligns with the highs from October and September, as well as the upper side of the Bollinger Band. On the downside, initial support is at 1.6184. A drop below this level could expose the pair to 1.6095, and possibly further down to 1.6030, which is near the 100-day EMA. Falling below these points could signal a market trend change for the pair. As long as the EUR/CAD stays above 1.6200, it maintains a positive outlook. The current price near 1.6225 supports this view, as it trades above the 100-day moving average. This technical strength suggests that price dips could be viewed as buying opportunities for now. Nonetheless, the political instability in France, with snap elections set for November, adds risk for the Euro. This uncertainty is mirrored in the neutral RSI, suggesting that upward momentum might slow down. Consequently, pursuing gains above the 1.6300 resistance could be risky in the near term. For those who hold a bullish view but want to limit risk, employing a bull call spread may be prudent. This strategy involves buying November 1.6250 call options while selling 1.6350 call options. This way, one can benefit from potential upward movement while capping both risk and reward, making it suitable for the current situation. Considering the neutral RSI and the political challenges, we anticipate a period of consolidation for the cross. Implied volatility for EUR/CAD options has recently increased to 9.8%, the highest since the summer. Selling a short iron condor with strike prices outside the 1.6095-1.6350 range could be a way to profit from time decay if the pair remains within a range. To hedge against a drop below important support, buying puts with a strike below the 1.6184 level offers protection. Recall how the Euro reacted to political uncertainty during the 2017 French elections; a similar rise in volatility could occur. A decisive break below the 100-day EMA at 1.6030 would confirm a significant bearish shift.

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