Let’s take a look at the EURCAD’s daily chart. As you can see, the pair has been on a major downtrend since the global economy bottomed out last March 2009. The bias remains bearish given the pair’s present trend. Since there are no signs of reversal as of yet, the pair would more likely head further south. Although, it could trade for awhile between 1.4200 and last week’s low of 1.40571 before heading down because the stochastics are already indicating an oversold condition. In any case, if and when the pair moves below last week’s low, it could easily reach the 1.3800 handle. I’d be looking to short this one when it touches the second downtrend line or when it breaks below 1.40571.
Fundamentally, the Aussie is still the one of the most attractive currencies given its 4.50% interest rate and Australia’s relatively upbeat economy. The euro, on the other hand, is at the bottom of everybody’s pick list given the debt crisis that EU-member countries like Greece are experiencing.