Key Points
- The Euro after trading as low as 1.4407 against the Canadian dollar started recovering, but may fail.
- There is a bearish trend line meeting at 1.4480 to act as a resistance for the EURCAD pair in the short term.
- Today, the Euro Zone CPI report was released by the Eurostat.
- The outcome was as forecasted, as there was a rise of 0.4% in Sep 2016, compared with Sep 2015.
EURCAD Technical Analysis
The Euro traded recently from the 1.4664 high to 1.4407 low against the Canadian dollar where the buyers appeared to prevent further downsides. The EURCAD pair is currently recovering, but may face sellers near a bearish trend line formed on the hourly chart.
The 38.2% Fib retracement level of the last drop from the 1.4664 high to 1.4407 low may also act as a resistance on the upside along with the 21 hourly SMA.
So, as long as the pair is below the trend line resistance and the 21 hourly SMA, one may consider selling with a small stop.
Euro Zone CPI
Today, the Euro Zone CPI, which captures the changes in the price of goods and services was released by the Eurostat.
The market was expecting a rise of +0.4% in Sep 2016, compared with the previous month. The result was in line with the forecast, and even the yearly change came in at 0.4% as forecasted. The report stated that the “largest upward impacts to euro area annual inflation came from restaurants & cafés (+0.08 percentage points), rents and tobacco (both +0.05 pp), while fuels for transport (-0.12 pp), gas (-0.11 pp) and heating oil (-0.10 pp) had the biggest downward impacts”.
The outcome was in line with the market expectation, but there was hardly anything to encourage the Euro bulls in the medium term.
