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

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

EUR/CAD has fallen a whopping 700-pips thus far this 12 months. The foreign money pair succumbed to an enormous wave of promoting strain 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 seemingly weighed negatively on EUR/CAD value motion as properly.

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

Supply: IG

These elementary forces have potential to proceed strong-arming EUR/CAD decrease throughout 2Q-2021. Although the Euro seems oversold in opposition to the Canadian Greenback judging by the relative power index, technical assist is sparse past 2018 swing lows across the 1.4760-price degree. Breaching this space of assist might deliver to focus the 76.4% Fibonacci retracement of final 12 months’s buying and selling vary as a attainable draw back goal for EUR/CAD bears.

This subsequent layer of assist beneath EUR/CAD across the 1.4670-price degree 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 the most important 2017, 2019, and 2020 swing lows and reinforces this technical assist zone as properly. Nevertheless, if promoting strain subsides and results in a Bollinger Band squeeze, this may encourage EUR/CAD bulls to make a rebound try again towards the psychologically important 1.5000-handle.