The euro remains under pressure, extending its corrective decline following the previous impulsive rally. Market participants are taking profits and trimming positions ahead of key macroeconomic releases, reducing demand for the single currency and keeping both pairs near important levels, with the potential for increased volatility.
Ongoing geopolitical uncertainty in the Middle East continues to act as an additional factor, particularly through its impact on commodity markets, especially oil. Fluctuations in energy prices are influencing inflation expectations and the outlook for monetary policy, which is particularly relevant for commodity-linked currencies such as the Canadian dollar.
Focus now shifts to upcoming data from the euro area, Canada, and the United States, which may reshape expectations regarding the next steps of major central banks. Weak or neutral data could increase pressure on the euro and extend the current downside move, while stronger figures may provide support and trigger a corrective rebound or stabilisation near current levels.
EUR/USD
After forming a bearish reversal pattern last week, EUR/USD continues to trade within a corrective downtrend. Sellers managed to push the pair below the key 1.1700 support level yesterday. If this level turns into resistance, a retest of recent lows and further decline towards 1.1630–1.1600 may follow.
Key events for EUR/USD:
- today at 09:45 (GMT+3): France consumer confidence
- today at 11:00 (GMT+3): Germany IFO business climate index
- today at 17:00 (GMT+3): US inflation expectations (University of Michigan)
EUR/CAD
EUR/CAD is also moving lower, testing important levels amid mixed fundamental drivers. Technical analysis points to the possibility of further downside towards 1.6000–1.5940, supported by a confirmed bearish “tweezer” pattern on the daily chart. A move above 1.6050 could bring buyers back into the market.
Key events for EUR/CAD:
- today at 15:30 (GMT+3): Canada core retail sales
- today at 18:00 (GMT+3): Canada budget balance
- today at 22:30 (GMT+3): CFTC CAD net speculative positions
Both pairs remain near key levels, with future direction dependent on a combination of fundamental factors. Depending on incoming data, the market may either shift into consolidation with attempts to hold support, or see an extension of the current corrective decline.
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