Scotiabank Forecast Eurcad Reversal Ahead

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Scotiabank Forecast Eurcad Reversal Ahead

Scotiabank Forecast EUR/CAD Reversal Ahead

According to Scotiabank analysts, the downside trend in the EUR/CAD has finally come to an end. They have also hinted at a potential rebound in the EURO/Canadian Dollar pair in the short term.

Scotiabank believes that the weekly chart of EUR/CAD hints that a reversal is in the initial process. To be more precise, they pointed out the formation of the morning star on the weekly chart, which is a bullish candlestick pattern. The pattern is still in the making and will only be complete if the EUR/CAD closes higher.

If the bullish candlestick pattern in the EUR/CAD is completed, it will be a strong signal of reversal in the pair. From a fundamental point of view, a bullish trend in this pair will require Euro strength and a weakness of the Canadian Dollar.

EUR/CAD Resistance At 1.4485

For now, the EUR/CAD will likely trade close to the resistance present at 1.4485 - 1.4515. That's worth around 30 pips and highlights the area where most of the EUR/CAD sell orders are present.

In the short-term, this resistance zone of the EUR/CAD will hold unless a clear break takes place on the daily/weekly charts.

If the EUR bulls take out this resistance zone, it will send the EUR higher towards the 1.4650 or higher. On the contrary, the nearest support for the EUR/CAD is present at 1.4325 and then 1.4160.

As per the Scotiabank forecast, the chances of a bullish recovery are higher as compared to an extension of the bearish move. Technical charts have already started to hint at this possibility but we have yet to see anything like this from the fundamental side.

In the coming days, it will be important to look at what the BoC and ECB say about their next policy move. A dovish BoC while a hawkish ECB will favor the upside move in the EUR/CAD pair.

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