EURCAD Long Opportunity Into ECB

EUR Upside RisksAll eyes are on the ECB today and on the back of recent commentary from policy makers, traders are widely expecting further pushback on rate-cut expectations. Several ECB members recently, including president Lagarde, have warned that the bank’s fight against inflation is not yet over, presenting the case to keep rates in restrictive territory for longer and stressing that it is in no rush to cut rates. These comments are in fierce opposition to general market sentiment which, over recent months, had moved in favour of expecting an ECB rate cut as early as April.ECB Pushback to ContinueToday, the ECB is expected to reiterate this message. In line with a more hawkish backdrop globally (Fed pushback, higher UK inflation, hawkish BOJ signalling), the ECB looks likely to stick to this guidance on rates, refusing to be drawn into committing to a timeline on rates. This should keep EUR supported near-term as traders scale back their rate-cut expectations.BOC/ECB DivergenceEURCAD is a strong candidate for EUR longs today on the back of the BOC meeting yesterday. The bank held rates unchanged while noting that its focus had now shifted to discussing when to cut rates, instead of whether to tighten further. These remarks create plenty of tradable divergence between the ECB and BOC near-term which should keep EURCAD supported.Technical ViewsEURCADThe downturn from 1.5050 has seen price finding firm support into the 1.4612 level. While this area holds, a further rotation higher is likely with 1.5050 the key level for bulls to break. The downside, 1.4460 is the next support to watch on any move lower.