Long EUR/CAD comment and orders
Long half unit EUR/CAD at 1.50806; s/l 1.4893; t/p 1.5493
Canadian bank stocks remain under pressure in the wake of the HCG event. BoC will presumably be very cautious on policy going forward, fearing the broader impact on the housing market and credit conditions.
The oil price has broken through March lows, and energy stocks are down significantly today.
EUR has broken up through the top of its range since the French election two weeks ago, suggesting uptrend developing.
Weaker commodity prices could spill over into some risk aversion that would tend to support EUR and weaken CAD.
US trade policy (renegotiating NAFTA) Is an additional factor that weighs on Canadian economic sentiment.
The difficulty with this trade is the levels, USD/CAD has been weakening for several weeks since the HCG news and oil price fall began.
Market positions in already short CAD and much less short EUR than it has been.
Risk events include the 2nd round French election on Sunday and Canadian employment report on Friday. Recent Canadian data has been strong, but the market is likely to fade stronger Canadian data at this time.
(See pdf for charts)