Insights 
VT 
EUR/CAD is stabilising around 1.5607, influenced by a delay in US tariffs on EU imports and strong Canadian Retail Sales data. The Euro has gained momentum from reduced trade tensions, with tariffs on European imports postponed by the United States.
Recently, EUR/CAD dipped below the 10-day and 20-day Simple Moving Averages but remains steady. Both the ECB and Deutsche Bundesbank presidents are set to speak, which may impact the currency pair depending on their comments about economic conditions.
Shift in Mood
Concerns about a proposed 50% tariff on EU goods affected the Euro. However, diplomatic dialogue between US and EU leaders has shifted the mood, offering the Euro a more stable outlook in early trading.
Canada’s Retail Sales rose by 5.6% year-on-year in March, exceeding the 3.8% forecast. Although monthly sales growth slowed to 0.5%, it surpassed the expected 0.1% decline, providing support for the Canadian dollar.
The EUR/CAD pair is experiencing mixed dynamics due to these factors. Future movements are likely to depend on upcoming inflation data and central bank statements, which might further influence the market direction.
As the EUR/CAD pair holds near the 1.5600 level, the recent events outlined suggest a temporary reprieve in volatility, though it would be premature to interpret the current balance as conclusive. The easing of trade tensions, following the United States’ decision to delay the implementation of tariffs on EU imports, has brought a glimmer of stability to the Euro—at least on the surface. That said, this calm carries conditional weight. We observe that momentum in the Euro is grounded largely in diplomatic developments rather than changes to core economic indicators.
The technical picture offers its own set of signals. EUR/CAD recently slipped below its 10-day and 20-day simple moving averages, a move that typically indicates a softening of short-term upward momentum. While this does not yet suggest a decisive trend reversal, it raises questions about the strength of the pair’s current trading range. It’s a reminder that price action must be assessed in the context of broader developments rather than isolated technical readings.
Canadian Data Reaction
What stands out perhaps more clearly is the reaction to the Canadian data. Monthly retail sales beat expectations comfortably, albeit supported by a one-off bump unlikely to be repeated in the near term. Even though such figures surpassed projections, the marginal slowdown in momentum—monthly growth was softer when compared to previous prints—means we should not be swept away by headline data. Still, this result gives the Canadian dollar a measure of support that cannot be ignored in the immediate timeframe.
With both Lagarde and Nagel scheduled to speak shortly, the direction of EUR/CAD could hinge on the tone they strike. Any indication of policy adjustment or concern over slowing industrial output might bring additional volatility to the pair. As we prepare for their remarks, we look for cues especially relating to price growth and labour pressures. Should messaging lean towards caution owing to structural slowing, it may weaken the Euro’s current footing.
There is also the matter of upcoming inflation figures across both economies. These could shape expectations around future rate changes, which remain a major force driving this pair. Inflation surprises, especially if higher than expected in Canada, could renew support for the loonie, particularly if paired with dovish central bank language out of the eurozone.
From a risk positioning stance, it remains essential to view technical and macroeconomic inputs together. Markets may appear tranquil for now, but the balance is delicate, and even a minor shift in rhetoric or a data miss could result in abrupt re-pricing. For now, we maintain a close watch on the spreads between European and Canadian yields, as they may offer early clues on positioning sentiment ahead of new data releases.
