EUR/CAD rebounds from sub-1.30 test but undertone remains weak. Economists at Scotiabank note that the pair could plummet until 1.2470 on a break under last week’s low at 1.2875/80.

EUR/CAD retains a lot of underlying, downward momentum

“Short-term (intraday and daily) trend oscillators have moderated but bearish weekly and monthly DMI readings imply that this market retains a lot of underlying, downward momentum which will leave the EUR facing firm resistance on minor gains and ongoing downside risk.” 

“Stiff resistance above the market remains intact at 1.3290/00. At the very least, the EUR needs to regain – and hold above – this point to establish a stronger base for a reversal in what is now a very extended run lower in the EUR.” 

“Below last week’s low at 1.2875/80, there is nothing of note in terms of EUR support until 1.2470.”