BNP Paribas entered a short position on EUR/CAD 1.4380, with a target at 1.3800 and a stop at 1.4575.
That’s how analysts rationalize their bearishness: “The main drivers of EUR weakness remain in place and signal further downside for the currency, particularly as perceived risks of further ECB easing have risen after ECB President Draghi’s Jackson Hole speech. We believe the monetary policy divergence theme will be sufficiently dominant to compel markets to maintain sizeable EUR shorts. We also spot an opportunity in going against the market’s excessive bearishness on CAD.”
Analyst underline that EUR short positions are big, but the currency is still far from being oversold.