EUR/CAD Signal Today - 12/07: EUR Breaks Out (Chart)
Date
7/13/2024 11:05:28 AM
(MENAFN- Daily Forex) Potential Signal:
I am a buyer of this market on short-term pullbacks, with a stop loss near the 50-Day EMA. I would be aiming for the 1.49 level at this juncture.
In my daily EUR/CAD analysis, it's hard not to notice that the euro has broken out against the Canadian dollar. This makes quite a bit of sense, due to the fact that the US CPI numbers missed. Remember, the Canadian economy is extraordinarily sensitive to the United States, and it's also possible that a lot of people read through the idea of the United States seeing less inflation as a sign that the North American economy is finally cooling off.
It's almost like economists and traders have no idea what happens outside of the real world. As someone who lives in the United States, I can assure you that things have been tough for a while.
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Bank of Canada
It's worth noting that the bank of Canada has an interest rate decision in about 10 days, and that will be a major focus on what happens next. We already know that the European Central Bank has cut rates, right along with the Canadians, so now it could very well end up being a situation where we are in a major“race to the bottom.” I assume that people are assuming that the Canadians are going to be better at losing than the Europeans, and it could send this market looking to the 1.49 level above.
If we were to break above the 1.49 level, it's likely that we really start to take off to the upside, but right now I think we are more likely than not going to see a lot of choppy and sideways behavior, and that of course is something that we need to pay close attention to. Remember, the 1.4750 level has been like a magnet for price recently, so I think that does offer a certain amount of support, and I would not be surprised at all to see this market had back toward that level as it had been so crucial previously.
If we were to break down below there, then it's possible that we could go looking to the 200-Day EMA underneath. I don't expect that to happen, but it is the outlier type of situation that you need to be aware of, not necessarily try to plan for.
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