Keep An Eye on EUR/CAD

CAD should continue to be under pressure with Canada's domestic issues and perhaps even more importantly Saudi Arabia's declaration of war on oil which should continue to keep crude prices low as the battle between Saudi Arabia and Russia has only just begun.

ECB is set to act on Thursday and could cause a spike downwards on EUR/CAD. If we do spike into that supply zone shown on the chart - should be a beautiful buying opportunity.

Which option will the ECB take. Details for Thursday here.

  • Option #1: Business as usual

  • Option #2: Measured response

  • Option #3: Big bazooka

The other thing I noted earlier on Twitter was that the market might be pricing in more action than the Fed is going to deliver next week. Sharp reaction in DXY incoming if so. Since that tweet the dollar has been rallying as yields in the USA are rising.