- The Euro has been back and forth against the Canadian dollar during trading on Tuesday as we continue to dance around the 1.57 level.
- This is a pair that will be interesting because the Euro itself seems to be running out of steam against the US dollar.
- So generally speaking, you would expect to see it start to fall against other currencies as well.
But at the same time, the Canadian dollar itself isn't exactly strong. So, I do think that you will continue to see a lot of noisy sideways behavior, but I have a couple of levels that I am watching. Most significantly would be the 1.55 level, because if we fall there and the euro is falling against the US dollar, I would be shorting this market.
If We Break Higher from Here
On the other hand, if we break higher above the 1.58 level, then it's likely that the euro will go looking to the 1.60 level. Ultimately, this is a market that I think will continue to see a lot of volatility and choppiness. And I do believe that this is a market that has a lot to focus on.
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Crude oil obviously has its influence and unlike the dollar against the Canadian dollar. Crude oil actually can move this pair because obviously Europe doesn't really produce much. And of course, we have a scenario where we have been so bullish that we have reached this very important level that goes back multiple years. And this range has been a bit of a ceiling. So that's another reason why I think if we can break down below the 1.55 level, this market falls apart, probably going towards the 1.50 level. That being said, this is a market that does tend to be very choppy so you have to be very patient with the overall position sizing that you employ in this pair.
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