EUR/CAD - Good levels to build mid-term short position

EUR/CAD - D1

Our expectations - the euro lose steam day before the ECB meeting, after which Mario Draghi is expected to confirm the direction of monetary policy, namely tightening. Judging by the market reaction, it seems that traders have already accumulated this news and there is nothing to provoke purchases of the United Currency. The extra weight of the EUR is also the upcoming meeting of Jean-Claude Juncker with Donald Trump in the United States, where Juncker is expected to make two proposals: abolishing car tariffs for all trading partners and creating a limited free trade agreement between the US and the EU with regard to industrial goods. Judging by Trump's latest speeches, however, I expect he to reject them, which will lead to further pressure on the euro.

In terms of CAD, the rise in oil after the smaller oil reserves in the US has a positive impact on the currency.

Technically, the pair registers a strong downward momentum that activates the flag formation in the downward direction and at the same time the price has passed below the 200-year average. In the last 50% Fibonacci test, the downward trend trend correction was fake, followed by short-term consolidation and rebundling of the underlying diagonal.

SL: 1.5494

Alternative Scenario: If the price moves over the resistance zone and stays there in several successive bars, the negative scenario will wreck and we are more likely to see an increase in the euro. It seems that everything will depend on Juncker's meeting with Trump today and the decision of the ECB tomorrow.

Read more:

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