- CAD is tightly correlated to oil prices and the bull trend in oil is underpinning the pair.
- The recent decision, made on Tuesday, to pull out the US from the Iran nuclear deal is boosting oil prices.
- The EUR/CAD is getting near the 200-period simple moving average on the daily time frame.
The EUR/CAD is trading at around 1.5230 down 0.87% on Wednesday.
The EUR/CAD tanked about 150 pips from the Asian highs at 1.5370 as the Canadian dollar is seeing strong demand across the board after US President Donald Trump confirmed that the United States pulled out from the Iran nuclear deal and is ready to impose new and harsher sanctions on the oil-producing country.
The news is bullish for oil as diplomatic tension with Iran could lead to an oil supply squeeze of up to 300,000 barrels per day according to analysts.
On the recent Iran decision, Ambassador Ryan Crocker said: “We have seen Britain, France, Germany and indeed Iran pledge themselves to keep the agreement going. I think what we've done here is just open the door to what will be a pretty tumultuous period ahead. It may result in some other options or modifications that would ease all of this. It may not. But it's going to be playing out over a number of weeks before we can really measure what happens".
EUR/CAD 4-hour chart
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The trend is bearish and the next supports in sight are located at the 1.5200 figure and at the 1.5111 former swing low. If the bulls manage to pull the cross back up, the next resistance is priced in at 1.5316 swing low and at 1.5444 swing high. The EUR/CAD is trading below its 50, 100 and 200-period simple moving averages on the 4-hour chart suggesting a strong bear trend. It is also worth mentioning that the EUR/CAD is getting near the 200-period simple moving average on the daily time frame at 1.5190 which can provide potential support.
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