- It’s clear that the EUR/CAD pair is threatening a major break out at this point in time as the Euro has traded all the way to the C$1.49 level in the early hours, and now looks as if it is trying to do everything, we can to break out above the short-term resistance that we had seen.
- If we can, then the market is likely to go to the next logical place, the $1.50 Canadian level, which of course is a large, round, psychologically significant figure in could attract a bit of attention for no other reason than the options markets and of course the fact that humans like the idea of large, round, psychologically important figures.
Euro Continues to Benefit from Federal Reserve Speculation
The euro itself has done fairly well against most currencies, as traders are starting to bet on the idea that the Federal Reserve may cut rates soon. If they do, then it should help the EUR/USD pair, which of course is a major influence on what happens with the euro overall. Furthermore, you are talking about comparing the euro against another North American currency, and one that is highly correlated to what’s going on in America. After all, the Canadian/US border features a massive amount of trade, and quite frankly the Canadian economy is highly dependent on a strengthening US economy.
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In other words, this may not have a whole lot to do with Canada at all. It may have more to do with the fact that the US dollar is losing its grip on the euro, and if that’s going to continue to be the case, the market is likely to continue to see upward momentum. If we can break above the $1.50 Canadian level, then it’s likely that the market could go much higher. On the other hand, if we break down below the C$1.4850 level, then we could see a drop down to the C$1.4750 level where the 50-Day EMA currently resides. Ultimately, I do think this is a market that you continue to look for buying opportunities on short-term pullbacks.
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