• EUR/CAD strengthen on Tuesday as traders digested soft German investor sentiment data and a raft of remarks from policymakers.
• ECB officials noted on Tuesday that eurozone inflation risks are balanced and economic growth is exceeding expectations, reinforcing expectations that rates will remain steady.
• Both ECB’s Frank Elderson and Croatian central bank’s Boris Vujcic, regarded as moderate hawks, signaled confidence in the economic outlook, with recent healthy data pointing to stable rates in December.
• German investor sentiment dropped unexpectedly in November, with the ZEW economic research institute reporting its economic sentiment index fell to 38.5 from 39.3 in October.
• Markets currently assign almost no probability to a rate cut this year, but still factor in roughly a 40% chance of a final 2% deposit rate reduction by mid-2026.
• Immediate resistance is located at 1.6260(Daily high), any close above will push the pair towards 1.6310 (38.2%fib).
• Support is seen at 1.6180(50%fib) and break below could take the pair towards 1.6128(Lower BB).
Recommendation: Good to buy around 1.6230 , with stop loss of 1.670 and target price of 1.6280
