The gap open in the euro that blasted the pair through the 1.0900 level continues to exert its force higher even into what is likely to be a generally dovish ECB meeting this Thursday. In the meantime, the loonie has been hammered by the double whammy of weaker oil prices and a new set of tariffs against Canadian lumber just issued by the Trump administration.

Fears of a trade war with US biggest trading partner have some traders concerned that USD/CAD could push towards the key 1.4000 level as capital flees from the Great White North. Even without any additional tension, the slow drift lower in oil could hurt the loonie for the foreseeable future.

All of which is creating a very powerful rally in EUR/CAD that could see the cross hit the key 1.5000 mark within the next few days. A runaway gap is a rare technical formation but when it occurs it can lead to powerful rallies that could last for days. EUR/CAD continues to exhibit all signs of such a setup.