28 Jan 2015
EUR/CAD neutral: Ahead of FOMC, its about the greenback
FXStreet (Guatemala) - EUR/CAD is currently trading at 1.4148 with a high of 1.4160 and a low of 1.4066.
EUR/CAD is consolidated after a decent recovery from 1.3826 up to 1.4160, through decent offers at 1.4040 and upwards and onwards in a chop and a drift. This now puts the pair into neutral ahead of the FOMC later today. At the previous meeting the Canadian dollar moved lower over a cent vs the euro. This time, bears could looking for 1.2380 and 1.2310 on a dovish outcome vs the dollar while EUR/CAD may also see the downside open up as it might be concluded that the euro has less room to fall ahead of the psychological 1.10 handle and yearly lows at 1.1097. A hawkish result could see a test of this level and also see a test of the 1.25 barrier and bring the 1.2730 2005 highs into focus in funds.
Meanwhile, analysts at TD Securities explained that they remain neutral on EUR/CAD’s technical outlook in the near-term. "Price remains stuck between 1.40/1.45 (roughly) on the daily chart and trend momentum remains weak; there is no reason to expect a sustained push above 1.45 or below 1.40 at the moment."
Short term risks in EUR/CAD
The analysts at TD Securities added, "Short-term risks are still skewed towards a retest of the top of the range, after the bullish daily “piercing line” signal Monday, but this is not a high conviction view. Longer-term, we still prefer to look to fade EUR rallies in the weeks ahead as the broader trend, such as it is, points to a push back to 1.35 (or lower)."
EUR/CAD is consolidated after a decent recovery from 1.3826 up to 1.4160, through decent offers at 1.4040 and upwards and onwards in a chop and a drift. This now puts the pair into neutral ahead of the FOMC later today. At the previous meeting the Canadian dollar moved lower over a cent vs the euro. This time, bears could looking for 1.2380 and 1.2310 on a dovish outcome vs the dollar while EUR/CAD may also see the downside open up as it might be concluded that the euro has less room to fall ahead of the psychological 1.10 handle and yearly lows at 1.1097. A hawkish result could see a test of this level and also see a test of the 1.25 barrier and bring the 1.2730 2005 highs into focus in funds.
Meanwhile, analysts at TD Securities explained that they remain neutral on EUR/CAD’s technical outlook in the near-term. "Price remains stuck between 1.40/1.45 (roughly) on the daily chart and trend momentum remains weak; there is no reason to expect a sustained push above 1.45 or below 1.40 at the moment."
Short term risks in EUR/CAD
The analysts at TD Securities added, "Short-term risks are still skewed towards a retest of the top of the range, after the bullish daily “piercing line” signal Monday, but this is not a high conviction view. Longer-term, we still prefer to look to fade EUR rallies in the weeks ahead as the broader trend, such as it is, points to a push back to 1.35 (or lower)."