EUR/CAD retreats from 2-year high resistance, Poloz next week

• The EUR/CAD is closing the week with a reversal pattern.
• Bank of Canada Governo Poloz to speak on Tuesday at 14.30 GMT.

The EUR/CAD is trading at around 1.5800 down approx 0.48% on Friday so far. The main event of the week for the EUR/CAD has been the ECB meeting on Thursday, leaving rates unchanged and dropping the easing bias. 

Next week, Mr. Poloz the Governor of the Bank of Canada is set to speak on Tuesday at 14.30 GMT.

Brown Brothers Harriman says that the Bank of Canada will need to hike in April: “The central bank thinks that the removal of additional liquidity (rate hikes) will be needed, as the economic slack has been largely absorbed. It recognizes the significance of the uncertainty arising from trade issues.  While Deputy Governor Lane suggested that the quality of the growth in Q4 was better than the optics suggested, he maintained the cautious tone of Governor Poloz, which encourages us to favor a May move over April.” The next interest rate announcement is slated for April 12. 

It also worth noting big options expiring on the CAD on Friday according to BBH:
“The US dollar has tried pushing through the CAD1.30 level several times. If it does not happen soon, we suspect momentum traders will look to deploy their capital elsewhere. The MACD and Slow Stochastics are rolling over. Two large options expire today against the Canadian dollar. The first is a $520 mln option at CAD1.2860 and the other $1.9 bln struck at CAD1.30.”

EUR/CAD weekly chart

The EUR/CAD this week has posted a double top with the high made in January 2016. The bull run to 1.6000 has been somewhat parabolic with last week bar displaying an above average ADR (average daily range) which may signify exhaustion. 

EUR/CAD daily chart

Support is seen at 1.5700 23.6% Fibonacci retracement, followed by 1.5280 which is the 50% Fibonacci retracement. To the upside, the 1.6100 2-year high should provide resistance after which the gates are open to potentially reach 1.7000 historical high.