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Euro remains stronger against Canadian Dollar following Eurozone Trade Balance data

The Euro (EUR) is strengthening against the Canadian Dollar (CAD), trading near 1.6100. Despite a Eurozone trade deficit, hawkish comments from ECB officials have kept rate hike expectations alive, while the Canadian Dollar has weakened due to falling oil prices.

Euro remains stronger against Canadian Dollar following Eurozone Trade Balance data

Market Overview

The EUR/CAD currency pair has extended its gains for the second consecutive day, trading around 1.6100 during European market hours. The Euro continues to show resilience despite a shift in the Eurozone trade balance from a 1.3 billion euro surplus to a 7.8 billion euro deficit in May.

Key Drivers

1. ECB Hawkishness: European Central Bank (ECB) officials, including Marin Kocher and Joachim Nagel, have signaled a readiness to act decisively on monetary policy if necessary. This hawkish stance has offset concerns regarding a contraction in Eurozone industrial production and maintained market expectations for future rate hikes.
2. Canadian Dollar Weakness: The Canadian Dollar, which is sensitive to commodity prices, has faced downward pressure as crude oil prices ease. This decline persists despite ongoing geopolitical tensions in the Middle East, specifically regarding potential supply disruptions in the Strait of Hormuz following recent US-Iran conflicts.

Conclusion
The Euro remains supported by the prospect of higher interest rates, while the Canadian Dollar struggles to find momentum amid fluctuating energy markets. Investors continue to monitor ECB policy signals and global energy supply risks as primary factors influencing the EUR/CAD pair.

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EURUSD Outlook: Neutral with Bearish Pressure Ahead

The current outlook for $EURUSD is neutral to slightly bearish.

While the pair shows resilience, significant headwinds persist.

Key Factors

• Bullish Support: Cooling US inflation data has provided a floor near 1.1400.

• Bearish Pressure: Rising geopolitical tensions in the Middle East are boosting crude oil prices and driving demand for the US Dollar as a safe haven.

Technical Structure:

The pair is currently in an ABC upward corrective pattern with limited room for further gains. Technical Levels

• Resistance: 1.1480 – 1.1510

• Support: 1.1440 – 1.1410 Expectation: A reversal is anticipated in the near term as the corrective structure exhausts its upside potential.

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Fed Governor Cook

Current Stance: Policy remains mildly restrictive.

• Fed Strategy: The #FOMC can take its time and wait for more data before making policy changes.

• Inflation View: One month of higher #CPI and #PPI readings does not establish a trend.

• Key Takeaway: The #Fed views the recent inflation uptick as a potential outlier, not yet evidence of persistent #inflation.

Forexsource.net

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BoC interest rate unchanged

Breaking: BoC kept interest rate unchanged at 2.25%, as expected.

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WTI crude oil’s outlook remains neutral to bullish

WTI crude oil’s outlook remains neutral to bullish.

Ongoing tensions between the US and Iran near the Strait of Hormuz are helping sustain a geopolitical risk premium, which is offsetting concerns about weak demand.

Although the proposed 20% transit toll was withdrawn, the US naval blockade and retaliatory military actions continue to pose risks to supply chains and support supply-related anxiety.

As a result, these persistent geopolitical tensions have helped create a firm price floor and are maintaining an upward bias in WTI prices.

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