EUR/CAD: Gains through 1.36 to clear the way towards 1.40 – Scotiabank

EUR/CAD neared 1.36 earlier this week. The recovery needs to extend through this level to reach 1.40, economists at Scotiabank report.

Initial retracement resistance at 1.3606 is reachable

“Long-term (monthly) price action is supportive of a broader reversal developing; monthly candle patterns suggest a bullish ‘morning star’ reversal developed around the Aug low in the EUR.”

“Initial retracement resistance is 1.3606 (23.6% retracement of the 2020/21 decline from 1.5975/1.2875) and is reachable, we believe. Gains through here on a sustained basis target additional EUR appreciation towards 1.40 (38.2% retracement at 1.4062) in the medium-term.”