EUR/CAD is a pair that I don't talk about very often. However, if you look at the Canadian dollar in general, you see strength. This makes sense as the oil markets have continued to be resilient in the face of a fairly strong selloff. As an example, the Thursday trading session for the light sweet crude contract saw the futures market drop, only to form a hammer by the end of the session just above the $85 level. This looks as if the oil markets are going to pop soon, and as such it should drive demand for the Canadian dollar up.
Conversely, you have the European Union which is a complete mess at the moment. The bond yields are spiking, it seems that nobody truly agrees on anything of substance, and of course markets absolutely despise uncertainty. The European Union is an area that is full of just that, and as such isn't a place I want to invest any money at the moment.
One of the easiest ways to make money trading the Forex markets is to pay attention to the global macroeconomic forces at work. If you can marry this with technical analysis, you will find that trading the Forex markets really isn't as difficult as many people make it out to be. Since we know that the oil markets are primed for a spike in price, be it as a result of a simple bounce in and oversold condition or even based upon Iranian saber rattling, we should see the Canadian dollar pick up a bid. Then of course you know that there's problems in Europe.
Multi-year lows broken.
The breaking of the 1.25 level is significant as that level has been supportive several times on the monthly chart. The fact that it is given way and we are closing below it by a good 75 pips or so, does suggest that perhaps there is a serious move lower coming. This is actually a long-term trade, as this could be a cyclical move. You'll notice that the previous for candles hovered just above the 1.25 level, we had broken below it on Wednesday, and then retested it earlier on Thursday. This looks like a classic breakdown in support.
With this in mind, I am already short of this market and should be for quite some time. Keep in mind that the United States is growing, and as such this helps the Canadians as well. This may not be a massive move right away, but I do believe that this is a longer-term trend that is starting to form again.