The euro was positive initially on Thursday but continues to see a lot of hesitation to gain against the Loonie at the moment. Short-term traders will continue to like this pair, I believe.
EUR/CAD
The euro had shot higher during the early part of the trading session against the Canadian dollar, slamming into the 1.61 level before giving back some of the gains.
We are currently stuck between the 200-day EMA and the 50-day EMA in what is a very sideways market. This does make sense because, quite frankly, neither central bank is in play at the moment with anything major.
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Rangebound Dynamics and the 200-Day EMA Support
You can look at this as a consolidation play, and if you pull up the stochastic oscillator, we're not quite there yet, but we're almost in the oversold and crossover part, and that could fire off a signal for short-term rangebound traders.
We've been in a range between roughly 1.60 and 1.63 since April. I don't see this changing, at least not in the short term. And now that we're here at the 200-day EMA, there would be some support right around this area. Now keep in mind, the moving averages are pretty flat, and that doesn't help necessarily, but it's also a market that, quite frankly, I think is just trying to figure out where to go from here.
There is the oil component on both sides. Does the Canadian dollar get a boost from oil, and does the euro get hurt by a lack of energy this winter because of the Strait of Hormuz being closed? This could be a very active pair, but I think right now, as we are still just trying to wait out whatever happens next, this is a market that range-bound short-term traders will continue to be attracted to.
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