Normally EUR/CAD classifies as a neutral currency pair, neutral meaning its caught between EUR/USD and USD/CAD and doesn’t wander far from the center. EUR/CAD’s neutrality is seen for example in market moving economic announcements. Sometimes it moves, others times it assumes its neutral stasis position. When EUR/CAD moves and trends, its unstoppable. When its neutral, its a dead issue. It wanders and moves through its various market periods of big moves or dead stasis. Through dead periods, it serves well as a hedge.
EUR/CAD is interesting through its current period due to an 85% Correlation vs EUR/USD and 92% vs USD/CAD and viewed from 1 year. Part of the correlation explanation is found in EUR/USD’s 191 pip range over the past 8 days from 1.1304 to 1.1495 and USD/CAD 309 pip range over 14 days from 1.2835 – 1.3144.
The final part of the explanation is found in WTI Crude as its range is holding between 42.87 and 47.56. On a short term day by day basis from MA’s ranging between 5 – 20 days, EUR/USD, USD/CAD and crude are sharing an ongoing inverse and positive correlation Longer term, crude correlations vs USD/CAD are clearly negative and positive V EUR/USD. Correlations inform a clearly tight market all around yet a warning as an impetus for a breakout is coming. What changes the Correlations is resolution of EUR/USD below at 1.1150 and 1.1256 and above at 1.1595. USD/CAD supports are many but the big number is found at 1.2249. What EUR/CAD is telling us is it can’t hold its present position due to an alignment problem.
From current 1.4835, EUR/CAD supports below are many and solid beginning with 1.4641, 1.4617, 1.4585 and 1.4565. Long, medium and short term, EUR/CAD is way oversold and like all EUR cross pairs has the potential to fly higher. A break of 1.4565 below targets 1.4300. Intraday, averages 5, 10 and 20 are driving EUR/CAD prices and are approaching overbought. The extremes in prices are excellent sell points and found at 1.4969, 1.4957 and 1.4928. The 50 day is found at 1.4824.