- Joseph Barreca
EUR/CAD Analysis & Forecast
EURCAD Short - EURCAD remains in a steady bearish trend as the EUR faces risk of continued recession, not to mention the gas crisis threatening the Eurozone right now too. The minutes released from the ECB July meeting didn't bring anything new to the table. Increasingly, concerns about a weak Euro have become a very central theme within the Governing Council.
Expect to hear more on this topic from an intensifying ECB speaker activity this week, even though the ECB's ability to offer a solid floor to the Euro has proven blatantly limited given the persistence of high energy prices.
On the COT table EURCAD currently has a score of -7, or a Strong Sell rating after adding up all categories.
Taking a look at EURCAD, we see that retail traders are 72% long, and 28% short. We consider this information most useful when a market is at an extreme reading from retail traders. If the retail crowd is 60% or more positioned to one side, we get a +1 or -1. Currently, the EURCAD gets a reading of -1 in this category. Remember, if the retail crowd is very long, we will look to short, and vice versa. Taking a look at seasonality, we get a score of +1. What this tells us is that based on historical data, this market tends to rise during this month.
Trend reading is based on the daily chart, using the 5, 8, and 21 Exponential Moving Average. The more 'aligned' they are, the stronger the trend up or down. In this case, we have a score of -2. Finally, let's look at fundamentals. GDP growth favours the CAD, inflation favours the CAD, unemployment favours the CAD and interest rates favour the CAD. We look to trade EURCAD to 1.255730 level.
On the table below you can see EURCAD the 'Sentiment' table you can see 72% of retail traders are LONG the EUR while 67.49% of Institutional traders are long the CAD. A good bet is usually to be against the retail traders. Further supporting EURCAD push down. On the 'Fundamental' table you can see EUR has 6.6% unemployment while USD has 4.9% and on the interest rates CAD sits at 2.5% while EUR sits at 0.5%. A stronger interest rate indicates a stronger economy. On the 'Score Summary' table it has given us a rundown of the overall bearish score for EURUSD with a reading of -7 out of 10. The more negative the score, more bearish the currency.
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