Listen to the latest market mood for the EURCAD.

The Bank of Canada is one of the most optimistic central banks at the moment. The next step is for the bank to start talking about bond tapering. The GDP data for January released yesterday showed a bigger than expected build at +0.7%. This bodes well for a more bullish BoC meeting next month and should support CAD. However, one key risk is oil prices which influence CAD.

In contrast, the eurozone is struggling to roll out vaccines and there is a growing risk of a third wave embracing the eurozone. This will mean a slower re-opening of European Countries and is likely to weaken the euro. The more serious the latest case count rise becomes, the weaker the euro will likely become.

This means that the EURCAD could see sellers on retracements over the coming few days.

Key Trade Risks:

• Any significant improvement in the outlook for Europe and the spread of COVID-19 will invalidate this outlook.
• If oil prices fall sharply that will invalidate this outlook and weaken CAD.