I don’t actively trade this pair so I don’t have a strong feel for what the correct levels are to be entering the market, but I’m pretty convinced from the fundamental side that we should be selling any small relief rallies.
There is no way that the ECB can be anything other than dovish, given that German economic data and EZ CPI remains soft, and the Russian sanctions are likely to weigh even more heavily on a fragile economy.
The market has been trying its best to get bullish USD/CAD once again over the last few days but not only is momentum lacking, the market is also trying to jump on at the wrong levels.
So I think this will be another classic cross move with both legs headed in the same direction, in this case with EUR/USD and USD/CAD to both fall. Definitely worth watching closely.