EUR/CAD Near-Term Outlook 

EUR/CAD Economic Outlook 

The EUR/CAD pair rose at the start of trading on Tuesday after traders increased their bets on an interest rate hike by the European Central Bank (ECB) following warnings from ECB President Isabel Schnabel about the continued economic impact of the Iranian conflict and persistently high core inflation.

However, gains were limited, and the pair retreated again due to weak inflation data and dovish comments from ECB President Christine Lagarde, who last week indicated a more balanced outlook for inflation and growth in the Eurozone.

On the Canadian side, the yield on the 10-year Canadian government bond (CA10YT=RR) fell by 1.8 basis points to 3.426%. Additionally, rising oil prices today could provide some support for the Canadian dollar.

We also await Canadian jobs and unemployment data on Friday.

EUR/CAD Technical Outlook 

The EUR/CAD pair rose today near the 1.6270 resistance level, which held firm and pushed the pair down. The pair is currently trading below the daily downtrend line, near the resistance level of 1.6270.

This suggests a potential pullback, targeting 1.6190 as an initial target, followed by 1.6050 as a secondary target.

This scenario would be invalidated if the pair breaks above the 1.6290 daily downtrend line.