Key Points
- The Euro started a downtrend after facing sellers near 1.4300 against the Canadian Dollar.
- There was a major bullish trend line broken at 1.4060 on the 4-hours chart of EURCAD.
- Today, the German Import price index report was released by Deutsche Bundesbank.
- The result was above the forecast, as the Import Price Index rose 1.9% in Dec 2016, compared with the +1.3% forecast.
EURCAD Technical Analysis
The Euro after completing an uptrend against the Canadian dollar near 1.4300 against the Canadian dollar found sellers and moved down. The EURCAD pair declined and moved below a major bullish trend line at 1.4060 on the 4-hours chart.
The pair also broke the 21 hourly simple moving average at 1.4115 for further declines in the near term. It is currently finding bids near 1.3960-1.3980, and may correct higher.
Even if the pair corrects higher, it remains in a downtrend. There is a high chance of EURCAD trading towards the 1.3920-1.3900 support area, which is a major pivot zone for the pair and where buyers may appear.
German Import Price Index
Today, the German Import price index, which measures the change in prices for goods imported by Germany was released by Deutsche Bundesbank. The market was looking for a rise of 1.3% in Dec 2016, compared with the previous month.
However, the result was above the forecast, as the Import Price Index rose 1.9% in Dec 2016. The yearly change was +3.5%, more than the forecast of 2.7%. The result was positive, and may help the Euro in gaining a few pips against the CAD towards 1.4020.
Overall, the Euro may trade a few pips higher or correct higher, but it mostly remains in a downtrend vs CAD with resistance near 1.4020 and 1.4040.
