The Euro has been climbing against most of the other currencies for the last couple of weeks, and EURCAD is one of them. The pair took the advantage of the Euro strength and the Canadian dollar weakness. I think both the Euro and Canadian dollar should correct a bit, which means there are high chances that the EURCAD pair may drop in the coming days.
Looking at the 4 hour chart of EURCAD, there is an up-move trend line, which is holding the pair. There is also a support at around the 1.4560/70 level, as shown in the chart below. If the pair moves lower, breaks this trend line and the most relevant support and closes below it, then we will jump into a sell trade. Remember, we need a convincing close below the trend line before entering into a trade in order to avoid any false break trading.
Initial target should be around the 1.4450 level, and final target could be around the daily 20 moving average. Stop should be placed above the broken trend line and support level.
Reviewing yesterday’s events and trades
Yesterday, in the European session, Italian industrial production data, the UK’s industrial production data and manufacturing data were released. The outcome was better than expected, and as a result the Euro and GBP climbed higher. Later, after the ECB President Draghi’s speech the EURUSD climbed higher, and traded as high as 1.3794. The UK’s NIESR GDP estimate was also released during the NY session, which missed the expectations of 0.9%, and registered a reading of 0.8%.
Fundamental Outlook for the day
Today, the US federal budget balance data will be released, which can cause some moves for the US dollar. Other than this, there is no major event scheduled for the US today. Later, around the next Asian session, the RBNZ interest rate decision is scheduled. The central bank is expected to keep the interest rates unchanged at 2.5%. Furthermore, Australia’s employment data will also be released. The market is expecting the unemployment rate to tick higher from 5.7% to 5.8%. So, a lot of movements are expected in the coming Asian session for the AUD and NZD.
This analysis is taken from today’s Daily Market Forecast, which also includes trade opportunities on: EURUSD, EURGBP, USDJPY, AUDNZD, GBPAUD, EURCHF and GOLD.
Get it HERE: Vladimir’s Markets Forecast
Trade safe friends. Happy trading!
