Euro Cross Pick 10.25.2011
As the EUR/CAD finally breaks out of its narrow range, we should see the pair resume the rebound from 1.3396, and the euro-loonie looks poised to make another run at the 38.2% Fibonacci retracement from the 2008 high to the 2010 low around 1.4370-1.4400. As the Bank of Canada curbs its outlook for growth and inflation, it seems as though the central bank will continue to endorse a wait-and-see approach throughout the remainder of the year, and the dovish tone held by the BoC instills a bearish outlook for the loonie as Governor Mark Carney no longer sees room to remove monetary stimulus. However, as the EU Summit comes into focus, we may see the EUR/CAD consolidate over the next 24-hours of trading, and I will stick to the sidelines until the group unveils the much anticipated rescue plan.
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