EUR/CAD Weak point: Q2 High Buying and selling Alternatives

EUR/CAD Worth Forecast: Euro Weak point vs Canadian Greenback to Linger

EUR/CAD has fallen a whopping 700-pips up to now this yr. The forex pair succumbed to an enormous wave of promoting stress on the again of Euro weak spot and Canadian Greenback outperformance. This newest stretch of EUR/CAD draw back appears to largely comply with Eurozone covid woes along with surging crude oil costs. Diverging financial coverage steering from the European Central Financial institution (ECB) and Financial institution of Canada (BoC) has probably weighed negatively on EUR/CAD worth motion as nicely.

EUR/CAD Worth Chart: Weekly Time Body (August 2016 to March 2021)

Supply: IG

These basic forces have potential to proceed strong-arming EUR/CAD decrease throughout 2Q-2021. Although the Euro appears oversold towards the Canadian Greenback judging by the relative power index, technical help is sparse past 2018 swing lows across the 1.4760-price stage. Breaching this space of help might carry to focus the 76.4% Fibonacci retracement of final yr’s buying and selling vary as a attainable draw back goal for EUR/CAD bears.

This subsequent layer of help beneath EUR/CAD across the 1.4670-price stage additionally occurs to roughly align with the 61.8% Fibonacci retracement of its February 2017 to March 2018 bullish leg. The long-term uptrend prolonged by means of the main 2017, 2019, and 2020 swing lows and reinforces this technical help zone as nicely. Nonetheless, if promoting stress subsides and results in a Bollinger Band squeeze, this would possibly inspire EUR/CAD bulls to make a rebound try again towards the psychologically important 1.5000-handle.