Skip to Content
News & Analysis at your fingertips.

We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site. See our updated Privacy Policy here.

Free Trading Guides
Subscribe
Please try again
Select

Live Webinar Events

0

Economic Calendar Events

0

Notify me about

Live Webinar Events
Economic Calendar Events

H

High

M

Medium

L

Low
More View More
EUR/CAD Weakness: Q2 Top Trading Opportunities

EUR/CAD Weakness: Q2 Top Trading Opportunities

Rich Dvorak, Analyst

Share:

What's on this page

EUR/CAD Price Forecast: Euro Weakness vs Canadian Dollar to Linger

Advertisement

EUR/CAD has fallen a whopping 700-pips so far this year. The currency pair succumbed to a massive wave of selling pressure on the back of Euro weakness and Canadian Dollar outperformance. This latest stretch of EUR/CAD downside seems to largely follow Eurozone covid woes in addition to surging crude oil prices. Diverging monetary policy guidance from the European Central Bank (ECB) and Bank of Canada (BoC) has likely weighed negatively on EUR/CAD price action as well.

EUR/CAD Price Chart: Weekly Time Frame (August 2016 to March 2021)

EUR/CAD, EUR, CAD, IG, Technical Analysis

Source: IG

These fundamental forces have potential to continue strong-arming EUR/CAD lower during 2Q-2021. Though the Euro looks oversold against the Canadian Dollar judging by the relative strength index, technical support is sparse beyond 2018 swing lows around the 1.4760-price level. Breaching this area of support could bring to focus the 76.4% Fibonacci retracement of last year’s trading range as a possible downside target for EUR/CAD bears.

This subsequent layer of support beneath EUR/CAD around the 1.4670-price level also happens to roughly align with the 61.8% Fibonacci retracement of its February 2017 to March 2018 bullish leg. The long-term uptrend extended through the major 2017, 2019, and 2020 swing lows and reinforces this technical support zone as well. However, if selling pressure subsides and leads to a Bollinger Band squeeze, this might motivate EUR/CAD bulls to make a rebound attempt back toward the psychologically significant 1.5000-handle.

Top Trading Opportunities in this Quarter
Top Trading Opportunities in this Quarter
Recommended by Rich Dvorak
Get Your Free Top Trading Opportunities Forecast
Get My Guide

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

DISCLOSURES