The Bank of Canada remains hawkish in its narrative but has not deterred a Canadian Dollar (CAD) selloff as crude oil prices tumbled. This has given currencies like the euro a chance for a reprieve and potential reversal after years off downside. Lower crude prices are not a certainty as the Russia/Ukraine impact brings uncertainty but should the current trajectory hold, EUR/CAD could be in for more upside. Another major change could be from the ECB and its openness to more aggressive tightening measures as several officials and analysts forecast 50bps hike by September to tackle inflationary pressures in the eurozone after periphery bond fears have somewhat eased. 

The daily EUR/CAD chart above shows price action consolidating in a rectangle pattern since April but a breakout is looming. A push above rectangle resistance could bring into consideration the 1.4000 psychological zone once again but a move below rectangle support would negate that move.

The EMA levels (20 and 50-day respectively) in purple and blue, are converging and 20-day  crossover with the 50-day may signal the impending bullish move.