Euro falling against the loonie again
The EUR/CAD pair fell again on the session for Tuesday, making yet another fresh, new, low. The markets have been very bearish as of late, and the euro of course is a significant amount of drama just waiting to happen. The markets are approaching the 1.38 level as I write this, and I believe it will only be a matter of time before we see it broken.
The crude oil inventories announcement comes out on Wednesday, and this will obviously have something to say about the value of the Canadian dollar. The inventory number will be bearish, and I think this could be an opportunity to bounce in the short-term. However, the longer-term trend is most certainly down, and I think any rally should only invite more selling. After all, the European Central Bank looks light years away from doing anything close to tightening monetary policy.
North American strength
The Canadian dollar will not only strengthen due to oil markets, but also will look to show strength due to the overall economic situation in the United States. This is why I like the Canadian dollar against other currencies than the US dollar. The 50-day moving average has clearly been resistance over the last several weeks, and this looks to be a market that is ready to offer trading set ups to the downside.
Due to the large, round, psychological importance of the 1.35 level, I think this is the next target longer-term in this pair. This market does tend to bounce around a lot, but it also offers a nice trend - something you won't see in the EUR/USD pair.
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