Trade idea: EUR/CAD

After a period of consolidation through late June to July, EUR/CAD is started to push higher.

Source: Bloomberg

Naturally, falling oil prices are helping the trade and we may see a somewhat dovish shift from the Bank of Canada’s policy meeting this Thursday, although they won’t cut rates. There are clearly political worries on the horizon for Europe, but there are also a number of positive qualities for EUR as well, notably its twin surplus. Specifically, I would look at long positons in small size, adding to the position on a close above the March downtrend at C$1.4550.

This is a medium-term strategy and would be looking for C$1.5000 as a target. In terms of risk management, a daily close through C$1.4300 would suggest the idea is not working out and traders could look more intently at short ideas.

Click to enlarge

IGA, may distribute information/research produced by its respective foreign marketing partners within the IG Group of companies pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the research is distributed in Singapore to a person who is not an Accredited Investor, Expert Investor or an Institutional Investor, IGA accepts legal responsibility for the contents of the report to such persons only to the extent required by law. Singapore recipients should contact IGA at 6390 5118 for matters arising from, or in connection with the information distributed.

This information/research prepared by IGA or IGA Group is intended for general circulation. It does not take into account the specific investment objectives, financial situation or particular needs of any particular person. You should take into account your specific investment objectives, financial situation or particular needs before making a commitment to trade, including seeking advice from an independent financial adviser regarding the suitability of the investment, under a separate engagement, as you deem fit. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. In addition to the disclaimer above, the information does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. Any views and opinions expressed may be changed without an update.

See important Research Disclaimer.