Key Points
- The Euro traded higher recently against the Canadian dollar, but facing a major resistance near 1.4500-20.
- There was a support trend line on the hourly chart of the EURCAD pair, which is now acting as a resistance.
- In the Euro Zone today, the German Economic Sentiment was published by the ZEW.
- The German Economic Sentiment posted a reading of 0.5 in August 2016, less than the forecast of 2.
EURCAD Technical Analysis
The Euro managed to pop higher recently against the Canadian dollar but it found sellers near the last swing high of 1.4520. There was a support trend line on the hourly chart of the EURCAD pair, which is now acting as a hurdle for a recovery.
Moreover, the 50% fib retracement level of the last drop from the 1.4612 high to 1.4428 low is also acting as a resistance.
If the pair moves down from the current levels, then the 21 hourly simple moving average can be seen as a support area.
German ZEW Economic Sentiment
Earlier today in the Euro Zone, the German ZEW Economic Sentiment, which measures the institutional investor sentiment, reflecting the difference between the share of investors that are optimistic and the share of analysts that are pessimistic was published by the ZEW.
The market was expecting a rise from the last reading of -6.8 to 0.5 in August 2016. However, the actual was 0.5. The report added that the “ZEW Indicator of Economic Sentiment for Germany increased in August 2016. The index gained 7.3 points compared to the previous month, now standing at 0.5 points (long-term average: 24.2 points). “The ZEW Indicator of Economic Sentiment has partly recovered from the Brexit shock. Political risks within and outside the European Union,”
Overall, the EURCAD pair remains at a risk of more declines in the near term, as long as it is below 1.4520.
