• EUR/CAD edged higher on Monday but gains were limited as political tensions in France eased but investor caution lingered.
• Markets are showing caution when it comes to the euro because of ongoing political uncertainty in France. Although the government has decided to freeze its controversial pension reform, this move only offers a short-term relief for political tensions.
• Prime Minister Sebastien Lecornu plans to cut the budget deficit to 4.7% of GDP next year, down from 5.4% in 2025, as an initial step toward bringing it below the EU’s 3% ceiling a level widely regarded as necessary for placing public debt on a sustainable trajectory.
• Lecornu plans to tighten public finances by more than €30 billion through a combination of tax hikes and spending cuts, marking France’s largest budget squeeze in over a decade.
•Meanwhile,Canada’s consumer price index for September, due Tuesday, may provide additional insight into potential rate-cut prospects. Economists forecast inflation to accelerate to an annual 2.3%, up from 1.9% in August
• Immediate resistance is located at 1.6436 (23.6%fib), any close above will push the pair towards 1.469(Higher BB ).
• Support is seen at 1.6309 (SMA 20) and break below could take the pair towards 1.6257(38.2%fib).
Recommendation: Good to buy around 1.6320 , with stop loss of 1.6270 and target price of 1.6400
