In EUR/CAD quotes we have seen consolidation since May 2023. In December, the rates generally went into a mild calm, demonstrating to us the complete equivalence of the two currencies. This situation cannot continue indefinitely. Very soon we will see an increase in volatility and will try to find the most promising one among these two currencies in 2024.
The euro has been under constant pressure since 2022. The main problem was the decline in industrial production and high inflation. We can hardly expect significant improvements in the coming year, but the ECB may continue to tighten monetary policy to strengthen the euro. However, recent macroeconomic reports have been positive for the euro. In Germany, a trade surplus growth was recorded in November above forecasts, and in the Eurozone as a whole, retail sales fell less than expected.
In Canada, on the contrary, there is a tendency towards a reduction in the trade surplus and the maximum interest rate leaves no chance for the Canadian dollar. Oil prices, although they remain above $70, have dubious growth prospects against the backdrop of a slowing economy in China and the global economy as a whole.
On the chart we can see a flat trend in the range of 1.4170 - 1.5059 CAD. Most technical analysis tools indicate the effectiveness of the deals to BUY in favor of the euro, and we would agree with this signal, since we noticed the beginning of an upward impulse on the chart. At the same time, we do not rule out a full-fledged resumption of the upward trend, which was interrupted in May last year. The entry points will be the levels of 1.4170 and 1.5059, but their achievement is considered unlikely in the near future. However, purchases still the most effective.
