(Click on image to enlarge) Euro and LoonieKeep in mind that the Canadian dollar is often thought of as a proxy for crude oil, and of course crude oil has been on its back for a moment. However, we need to look at the Loonie itself, and the fact that the US dollar just punched through the crucial 1.40 level against the CAD. And in and of itself, it’s a very negative turn of events for the Canadian dollar as the US dollar is the most common “measuring stick” for strength or weakness.Simultaneously, we have seen the euro bounce from the crucial 1.05 level against the US dollar. This isn’t to say that the euro is suddenly going to be strong, just that perhaps it is oversold, and a bit of a bounce could translate into higher euro in this pair. In fact, we have already seen that play out so I think we will probably be watching the EUR/USD pair in order to see whether or not momentum will enter this market.The technical analysis for this pair is fairly negative, as we are well below the 200 Day EMA, which is currently residing near the 1.4875 level. However, if we were to break above there then I think the euro will really start to take off against the Canadian dollar. Quite frankly, this is an argument of “Europe versus North America” than anything else. That being said, the United States is clearly head and shoulders above Canada, so this does help you a little bit in that aspect as well, because you are not directly taking on the greenback.More By This Author:USD/CAD Forecast: US Dollar Continues To Power Higher Against LoonieEUR/AUD Forecast: Rallies After Bounce Against The Aussie DollarEUR/CHF Forecast: Consolidating Against Franc
EUR/CAD Forecast: Euro Finds Support Against Canadian Dollar
