EURCAD Testing Key Level

EURCAD is on watch for me here. I was a little premature it seems at the start of the month looking for a breakout. However, following the failed downside break of 1.3439 price has since reversed sharply higher, breaking out above the bear channel top. Bulls can now look for a break of the 1.3766 level targeting 1.39 initially and 1.4029 thereafter. EURCAD retail long is reducing nicely as we move higher here suggesting plenty of room for a fuller reversal higher.

Keep an Eye On

EUR is on the tear this week as ECB rate hike expectations kick into gear following Lagarde’s comments yesterday. With CAD softening on weaker oil prices, stage looks set for a decent move higher near term as the EUR short squeeze develops further. Keep an eye on Lagarde comments later today which are likely to reinforce ECB hawkishness helping keep EUR supported near-term.