EUR/CAD TO PLUMMET TOWARDS THE 1.37/38 ZONE AND BEYOND – SCOTIABANK

EUR/CAD is holding the recent trading range but technical pressures are building as the cross drifts back towards 1.43. A break below here would clear the way for a substantial drop to 1.37/38 and even beyond, economists at Scotiabank report.

EUR/CAD REMAINS PRONE TO WEAKNESS

“We continue to think that a break under the recent range low would signal potentially significant losses for the cross. The 1.4265 low from 2020 lies just below the market but this is the low end of the range in place since 2018 which peaked around 1.60.”

“A clear push under 1.43 would be construed as a bearish ‘flag’ breakdown and imply the risk of a significant (and potentially rapid) drop in the EUR in the next 1-3 months.”

“We think a decline to 1.37/1.38 may ensue but losses could well extend beyond that point in the longer run. We continue to think that modest EUR gains should be faded.”

“Resistance remains 1.4440/50, with ‘safe’ ground still distant at 1.46+.”