EUR/CAD Holds Around 1.6020 Ahead of Eurozone ZEW Sentiment Survey

EUR/CAD Consolidates Near 1.6020 as Market Awaits Eurozone Sentiment Data

The EUR/CAD currency pair remains steady near 1.6020 in late Asian trading on Tuesday, with investors turning cautious ahead of the release of the Eurozone ZEW Economic Sentiment Survey for August, due at 09:00 GMT. The pair’s near-term bias is supported by an upward-sloping 20-period Exponential Moving Average (EMA), indicating mild bullish momentum.

The upcoming ZEW report reflects the sentiment of institutional investors and analysts regarding Eurozone economic conditions. Market consensus expects the index to decline to 28.1, down from 36.1 in July, suggesting a modest deterioration in investor confidence amid ongoing economic headwinds in the bloc.

Canadian Labor Market Concerns Fuel BoC Rate Cut Bets

On the Canadian front, rising fears of a weakening labor market are fueling speculation that the Bank of Canada (BoC) may pivot toward interest rate cuts in the coming months. Deteriorating employment data has put pressure on the Canadian Dollar (CAD), giving the Euro some room to appreciate in this cross.

The BoC’s dovish shift could weigh further on CAD unless incoming domestic data surprises to the upside. This dynamic, combined with ECB policy uncertainty, keeps EUR/CAD traders closely attuned to macro developments on both sides.

ECB Policy Outlook: Will Easing Resume in September?

While the European Central Bank (ECB) paused its monetary easing cycle in July after reducing the Deposit Facility Rate to 2%, some investors remain on alert for a potential resumption of stimulus measures at the September policy meeting, especially if economic sentiment continues to soften.

With multiple policy uncertainties and data-driven volatility in play, the EUR/CAD pair could remain in a consolidation phase until stronger directional signals emerge.