After that sharp selloff following the downbeat ECB interest rate decision, the forex currency market signals are showing signs of a retracement on EUR/CAD. This could be the chance to hop in the downtrend at a much better price.
On the 4-hour chart, it can be seen that the rising trend line connecting the price’s lows since February has recently been breached. This is a sign that further losses are in the cards for EUR/CAD and that the latest uptrend is already turning.
Forex Currency Market Forecast for EUR/CAD
EUR/CAD could make a forex currency market retracement to the 1.5150 minor psychological resistance, which is in line with the broken trend line and the 61.8% Fibonacci retracement level. However, with selling pressure very strong on the euro, a shallower pullback might happen.
The pair might only pull up as high as the 38.2% Fib or the 1.5050 minor psychological resistance if bears keep pushing the euro lower every time it pops higher. Do keep in mind though that the Canadian dollar is also undergoing some weakness, as jobs figures from the Canadian economy have been much weaker than expected.
In terms of monetary policy though, the ECB is definitely the bigger dove. In their latest rate statement, Draghi hinted that the central bank is ready to ease in June but that this depends on how the CPI forecasts turn out. Later this week, the euro zone will release its actual CPI figures and any signs of weakness could lead to a much deeper euro selloff.
On the other hand, upbeat data could provide a chance for the euro to rally at a much better price for bears to short. This could lead to a retest of the broken trend line on EUR/CAD around 1.5150.
To contact the reporter of the story: Marco Roemer at email@example.com