The flat trend continues. Both currencies are weakened by various factors. Oil prices no longer support the Canadian dollar as they did last year, but again put pressure on the CAD. The Euro is weakened by a rapid recession in the eurozone and the ECB's monetary policy which is not helping to strengthen the Euro.
The situation has not changed this week. Recent macroeconomic reports on the EU economy were disappointing for investors: the ZEW business sentiment index fell to -21.1 pips and was much lower in June than investors expected; in the EU as a whole, the business sentiment is also far from the forecast values. Inflation is also slowing down, and only the data on the trade balance was positive because the surplus increased twice more than expected. Meanwhile, Italy's public debt has risen to a historic high, and if nothing changes for the better, Italy may find itself in the same crisis like Greece. The ECB is also putting pressure on the Euro. In particular, yesterday Mario Draghi announced the use of additional incentives for the economy if the economic situation worsens.
Canada is currently in a better position against the Euro. First, Canada managed to agree on the abolition of duties on imports of steel and aluminum to the United States. Also, the Canadian currency can be supported if there is a recovery in oil prices, which are now near the lowest levels for the year that. In particular, today oil has risen amid rising tensions in the Middle East and investors' expectations regarding the upcoming meeting this month between Donald Trump and Xi Jinping at the G20 summit.
We suppose that the flat trend will continue at least until the end of the month, and the support line, located at 1.4915 CAD, will be tested shortly. Therefore, the deals to SELL seem the most effective. Points of entry could also be specified at 1.4915 and 1.5195, the breaking of which may signal the emergence of a new trend. Most technical analysis tools also signal the efficiency of short deals.
