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EUR/CAD – Headed to 1.4400
EUR/CAD is headed for 1.4400 and possibly even lower. The sharp sell-off in EUR/CAD today was driven entirely by the rise in the Canadian dollar. CAD soared after the Bank of Canada’s monetary policy announcement. Interest rates were left unchanged which was widely anticipated and while the central bank admitted that wildfires in Alberta shaves 1.25% off Q2 GDP growth, they also expect growth to rebound in the third quarter. But it was the large drop in inventories that sent oil prices towards $50 a barrel and CAD to fresh highs. The 1.3000 support level in USD/CAD looks shaky which means the Canadian dollar could see stronger gains. Euro is also under pressure as the U.S. dollar extends its rise.
Technically, EUR/CAD has broken below the 50-day SMA, the May 17 and 18 low, the 23.6% Fib retracement 2016 decline as well as the 50% Fibonacci retracement of the 2015 to 2016 rally. With this move, there’s no support until 1.4400. As long as EUR/CAD holds below 1.4620, it is poised for a new leg lower.