EUR/CAD Forecast Today 14/02: Pulls Back (Video)

(MENAFN- Daily Forex)

• The Euro has had a very interesting session against the Canadian dollar as we have gone back and forth rather significantly as the 200-day EMA of course has offered resistance, but I think more importantly than 1.49 level has.
• The 1.49 level is an area that has been very important.
• I think traders will continue to look at that through the prism of maybe fair value when you look at the longer term consolidation over roughly the last nine months or so.

It's interesting that we failed here at the 1.49 level as it is a crucial level to watch. If we can get above there, that's obviously bullish, and it could send the euro toward the 1.51 level, but the way we pulled back from it suggests that we just don't have that kind of strength right now, and that does make sense. After all, we're talking about Europe. And on top of that, the Canadians may avoid tariffs altogether, and that could be the beginning of the end of the selling of the Canadian dollar. We'll just have to wait and see.

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Nonetheless, the Canadians have a huge trading partner in the United States. And unlike Europe, it's right next door. So, Europe has to deal with not only its internal issues, although France and Germany are coming out of a recession, but you have to deal with the UK and you have to deal with Switzerland, some of your bigger trading partners, and of course, China, which has been struggling.

So, with all of this being said, I think it does make a certain amount of sense that we fall from here, but I think it's going to be choppy. I don't think it's going to be a big clean move one way or the other. And in fact, if you're a range bound trader, this might be a great trading environment for you. If you see the market break above 1.49, then you assume it's going to go one to maybe two more handles higher. And if it doesn't, then maybe it drops another handle, you just have to wait and see, but that has been the pattern for quite some time now.

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