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EUR/CAD – Will 1.5000 Hold?
Oil appears to have found a near term bottom at the $25/bbl level and that has helped to keep loonie steady for the past few weeks as the pair has come way off its recent highs of 1.4600 and that in turn has driven EUR/CAD lower towards the key 1.5000 level. In a battle of two weak economies the euro is getting even more battered that the loonie as the data from the EZ goes from bad to worse.
Today’s IFO report which showed a very large 4 point decline in future expectations is only the latest data point to shows that German economy is coming dangerously close to a recession. That’s likely to keep euro under pressure for the near term as markets begin to anticipate even more easing from the ECB.
Meanwhile tomorrow’s oil inventory numbers could be key drivers of CAD trade. If the pressure eases the loonie could see a strong pop that could send it towards the 1.3500 level and that in turn could push EUR/CAD through its double bottom support at 1.5000