Key Events:

• The ECB cuts rates by 25bps, yet EUR/USD holds its ground above 1.08
• US President Trump pauses tariffs on Mexican and Canadian goods until April 2
• Canadian Employment Change and Unemployment Rate data are due today
• US Non-Farm Payrolls and Fed Chair Powell’s Speech are scheduled for today
• Key Upcoming Events: US CPI and BOC Rate Decision on Wednesday, March 12

Following its data-dependent approach, the ECB cut rates by 25bps amid declining oil price pressures near $66 per barrel, escalating trade war risks, and rising German debt levels due to increased defense spending, highlighting the need to boost economic growth while Eurozone inflation remains stable.

However, today’s non-farm payrolls report, along with next week’s CPI data, is set to shape the US Dollar inflation outlook and potentially influence established market trends, especially amid declining economic confidence, trade war uncertainties, and geopolitical turbulence.EURUSD FY

January’s inflation reports between CPI prints and the Fed’s preferred inflation gauge have added to market concerns, maintaining a cautious tone in currency markets ahead of today’s release.

Regarding the Canadian dollar, price action suggests longer-term strength against the US dollar, though volatility risks remain high due to Trump’s shifting stance on tariffs and broader USD movements.

Technical Analysis: Quantifying Uncertainties

EURUSD Outlook: Weekly Time Frame – Log Scale

Source: Tradingview

The EUR/USD pair has reached the target of its ascending triangle pattern, aligning with the upper boundary of its declining parallel channel since the July 2023 highs, near the 1.0850 level and the 0.618 Fibonacci retracement of the downtrend from September 2024 to January 2025.

While momentum indicators on the daily and hourly time frames show heated conditions, the weekly time frame reflects an inverted head and shoulders pattern that has met its target—yet remains shy of overbought levels.

Possible Scenarios:

• Bullish Scenario: A clean break above 1.0850 could extend the rally toward 1.09, 1.1040, and 1.1220, where the euro’s longer-term trend against the dollar will be tested.
• Bearish Scenario: If the pair respects resistance zones—including the pattern’s target, channel boundary, and Fibonacci retracement—a hold below 1.0850 could trigger a decline toward 1.0730, 1.0620, and 1.05, respectively.

USDCAD Outlook: 3-Day Time Frame – Log Scale

Source: Tradingview

The USDCAD is maintaining its rebound from the 1.4790 wick earlier in 2025, alongside the bearish momentum of the US dollar index. The drop is respecting the ratios of the Fibonacci extension tool placed between the 1.4790 high, 1.4160 low, and 1.4543 high.

With respect to the daily relative strength index, momentum is still leaning to the bear side, yet volatility risks are on the horizon with the upcoming US non-farm payrolls and Canadian employment data.Scenarios:A hold above 1.4320 can extend gains towards levels 1.4390 and 1.4420.

A hold below 1.43 can extend losses back towards 1.4230 and 1,4160.Longer term bearish forecast: a clean close below 1,4160 can extend further losses for the USDCAD pair in 2025 towards 1.4060 and 1.39 aligning with the 0.786 and 100% ratios.

Written by Razan Hilal, CMT

Follow on X: @Rh_waves