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.

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