Last Tuesday, the Australian dollar experienced its steepest drop of the year, falling by 1.18%, following higher-than-expected US inflation figures, which boosted the US dollar. However, the Aussie has since rebounded and is now trading at a two-week high against the US dollar. Investors are...
Will EUR/CAD follow EUR/AUD?
2020-03-04 • Updated
The Bank of Canada will announce its interest rate decision at 17:00 MT time. According to the forecast, the regulator will lower the key interest rate from 1.75% to 1.25%.
On Tuesday, the Reserve Bank of Australia cut its key rate from 0.75% to 0.5%. The AUD, however, strengthened versus the EUR. If you look at the chart of EUR/AUD, you will see that the pair went down on the day of the meeting and the following day.
Just like EUR/AUD, EUR/CAD has soared during the period since February 20. There’s a chance that the pair will follow the path of EUR/AUD after the BOC meeting. Technically, EUR/CAD met resistance at 1.4945 (100-week MA). The return below the 2018 resistance line in the 1.4880 area will be a bearish sign. On the H4, there’s bearish divergence. The decline below 1.4860 will open the way down to 1.4830 (200-day MA) and 1.4770 (November high).
Trade idea for EUR/CAD
SELL 1.4860; TP1 1.4830; TP2 1.4770; SL 1.4875
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