Key Points
- The Euro made a new low yesterday and traded below the 1.4650 support against the Canadian dollar.
- There is a bearish trend line formed on the hourly chart of the EURCAD pair, acting as a resistance.
- Today, the French Gross Domestic Product report was released by INSEE.
- The outcome was negative, as there was a decline of 0.15 in the GDP in Q2 2016.
EURCAD Technical Analysis
The Euro traded down recently against the Canadian dollar and tested the 1.4610 level. The EURCAD pair is currently attempting a recovery, but may face sellers near a bearish trend line formed on the hourly chart.
Moreover, the 23.6% Fib retracement level of the last drop from the 1.4752 high to 1.4612 low is also currently acting as a resistance.
On the downside, a break of the 1.4600 support may call for more losses may be towards 1.4560.
French Gross Domestic Product
Today in the Euro Zone, the French Gross Domestic Product, which is a measure of the total value of all goods and services produced by France was released by INSEE. The market was not expecting any change in the GDP in Q2 2016.
However, the report was negative, as there was a decline of 0.15 in the GDP in Q2 2016. The report highlighted that “Household final consumption expenditure edged down in Q2 2016 (-0.1% after +1.1%), as well as total gross fixed capital formation (GFCF) (-0.2% after +1.3%). With public expenditures, final domestic demand (excluding inventory changes) made a zero contribution to GDP growth in Q2 2016 (after +0.9 points in Q1 2016). Imports decreased sharply (-1.8% after 0.2%) while exports increased slightly (+0.2% after -0.4%)”.
Overall, the Euro may struggle to gain traction in the near term, which presents a risk of more declines in EURCAD.
