The Euro initially rallied on Wednesday but then plunged against the Loonie.
EUR/CAD
The Euro initially rallied a bit during the early part of the Wednesday session, but we continue to see the range-bound action play out.
The sell-off in the Euro suggests that the Canadian dollar could continue to strengthen. It's worth noting that the 1.60 level underneath has been support a couple of times in the past, and the stochastic oscillator is getting close to the bottom of the range and perhaps crossing over and jumping.
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The market has the 50-day EMA as well as the 200-day EMA being very flat. The 1.62 level above is a significant resistance barrier. Ultimately, this is a market that I think continues to see a lot of back-and-forth sideways action, and it would make a certain amount of sense as Friday is Canadian employment as well as U.S. employment numbers. And that means that the market will perhaps be holding its breath.
Canadian Employment and the 1.60 Support Level
Short-term traders might be looking for a bounce here, and it would make a certain amount of sense. I want to see that stochastic oscillator cross in the oversold position before I actually commit money to work, and I might get that opportunity closer to 1.60. That might be a late Thursday trade, who knows.
Now again, keep in mind that on Friday, in North American trading on Friday, we will get the jobs number coming out of Canada, and that obviously will have an influence on the Canadian dollar itself. So, we do need to watch that. But overall, this looks a lot like a market that is just trying to figure out whether or not it's going to stay in this range or if it's going to break out. Essentially, range-bound traders will just trade back and forth until something happens. That might be the play here.
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