EURCAD short
Going into this week I like the potential look of EURCAD shorts.
A 'weak' currency
The Eurozone growth picture is continuing to fall with Italy now officially entering a recession. Brexit uncertainties continues to weigh on the euro too and, although core inflation is holding up for the eurozone for now, the continued global growth slowdown is not showing much help for the economy. Justinhad a very good post on Friday last week outlning the way the the ECB has continually brushed off factors as 'temporary' that are slowing the euro zone. The question is, how long can they keep saying this?
A 'stronger currency'
The Canadian dollar is being unpinned by a rising oil price at the moment and, with February an excellent seasonal month for oil as Adam pointed out, that pressure looks set to continue. The BOC has remained reasonably optimistic compared to the Federal reserve which is on 'wait and see' mode.
The technical picture
So, Looking at the charts the EUR/CAD pair on the weekly chart looks set to test weekly support at the S1 and 200EMA level at around 1.4860.
Stops can be anchored above last weeks high at 1.5200. Traders could wait for a pullback this week on a Fibonacci Retracement level or key pivot point/ 100 or 200 EMA area.
