The euro continues to grind back and forth against the Canadian dollar, as we are looking at a very sideways market.
Short-term traders will continue to look at this with interest.
The euro fell against the Canadian dollar during trading on Tuesday as we continue to see a lot of back-and-forth sideways action. It is probably worth noting that the 1.61 level continues to be a bit of short-term resistance, but the 1.60 level below offers support.
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It is also worth noting that, over the last couple of weeks, each successive drop has been a little less than the one before. This suggests that there is more buying pressure coming into this market. The 50-day EMA, as well as the 200-day EMA, are both flat, and that means this could very well end up being a sideways market that short-term range-bound traders will probably continue to be attracted to.
The Canadian dollar will more likely than not be driven by what is happening in oil
The Canadian dollar will more likely than not be driven by what is happening in the crude oil market, as it is a major exporter, while the euro might be more or less thought of as the anti-U.S. dollar currency here.
With this, I like the idea of going back and forth with a slight upward tilt in this market, as it looks like the buyers are becoming slightly more aggressive. However, there is no real big movement here to suggest that we are going to see an explosion to the upside.
Overall, I believe that this market is probably going to try to reach the top of the longer-term consolidation, which could be 1.6250, depending on how you draw it, and I do not think that is asking a lot. The situation is not necessarily one where the central banks are wildly apart from each other, so this is more or less a read on the U.S. dollar, which has an effect on the euro, and the crude oil market, which has an effect on the Canadian dollar.
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