Friday’s PMI data took almost all the wind out of its sails and it badly needs the economic outlook to improve. 

Our economics team has cut its Eurozone growth forecast for this year to 0.9%, which remains above consensus. They downplay the significance of the PMI data but for now, EUR/USD continues to track short term rate expectations absurdly closely and the PMI data definitely had an impact on those. 

The EUR/USD danger is that it gets stuck in a tight range for a while longer, but if you can’t resist the urge to sell it, we’d recommend doing so against the CAD.