Key Points
- Euro looks like following a downtrend versus the Canadian dollar and may head down in the near term.
- There are a couple of bearish trend lines formed on the 4-hours chart of the EURCAD pair, which is acting as a resistance.
- The German Manufacturing Purchasing Managers Index (PMI) released by the Markit economics posted an increase from 54.4 to 54.5 in June 2016.
- The Euro Zone Manufacturing PMI also posted an increase from 52.6 to 52.8 in June 2016.
Technical Analysis
The Euro attempted to trade higher on many occasions versus the Canadian dollar, but it failed to gain pace. There are a couple of bearish trend lines formed on the 4-hours chart of the EURCAD pair, which stalled the upside move and currently acting as a hurdle for the upside move.
Moreover, the 100 and 50 simple moving averages on the 4-hours chart are also aligned with the trend line resistance.
So, as long as the pair is below the highlighted resistance, there are chances of more declines.
German Manufacturing Purchasing Managers Index
The German Manufacturing Purchasing Managers Index (PMI) was released by the Markit economics, which captures business conditions in the manufacturing sector. The market was expecting no change in the German Manufacturing PMI. However, there was a minor increase in the PMI from 54.4 to 54.5 in June 2016.
The report added that the “June data highlighted solid growth of production at German manufacturers, with the respective rate of expansion the fastest in over two years. In line with the trend for output, companies reported a sharp rise in the level of new work received during the month”.
Overall, the reports were positive, but the Euro may find it hard to trade higher against the Canadian dollar in the short term.
