Technical Bias: Bearish
Key Takeaways
Euro’s downside accelerated recently not only against the US dollar, but also against other currencies such as the Canadian dollar.
In the Euro zone, the French Nonfarm Payrolls will be released by INSEE for the fourth quarter of 2014.
EURCAD cleared an important support, which might now act as a resistance in the near term.
Recent bearish pressure on the Euro increased after the ECB started their bond-buying program giving one more reason to sell the shared currency.
Technical Analysis
The EURCAD pair recently cleared a critical support area in the form of a trend line on the daily timeframe. It also broke the 1.3620-80 support area and tested the 1.236 extension of the last leg from the 1.3753 low to 1.4491 high. This particular break suggests there is a huge amount of bearish pressure on the Euro, which could increase over time. There is a chance that the EURCAD pair accelerates towards the downside, and tests the 1.3500 swing area. The daily RSI is around the extreme, which is the only warning sign and points to the fact that the Euro is around oversold levels and might correct from the current or a bit lower levels.
If the GBPJPY pair moves higher from the current levels, then initial hurdle can be seen around the broken trend line at 1.3620.
Any further strength might face resistance around the swing low of 1.3750.
French Non-farm Payrolls
Later during the London session, the French Nonfarm Payrolls will be released by INSEE for the fourth quarter of 2014. Any weak outcome might weigh further on the Euro and cause more losses in the short term towards the 1.3500 level in EURCAD.
Trade Idea
One might consider selling rallies in the EURCAD pair around the 1.3600-20 area with a stop of around 40 pips.
Recommended Content
Editors’ Picks
EUR/USD holds steady above 1.0650, awaits US data and Fed verdict
EUR/USD is trading sideways above 1.0650 amid a softer risk tone and broad US Dollar strength on Wednesday. With European markets closed for Labor Day, the pair awaits the US employment data and the Fed policy announcements for the next directional move.
GBP/USD flatlines below 1.2500 ahead of US data, Fed
GBP/USD is off the lows but stays flatlined below 1.2500 early Wednesday. The US Dollar strength caps the pair's upside amid a cautious mood ahead of the top-tier US employment data and the all-important Fed policy announcements.
Gold treads water below $2,300, as Fed decision looms
Gold price is catching a breather below $2,300 on Wednesday, having hit a fresh four-week low at $2,281. Traders refrain from placing fresh directional bets on Gold price, anticipating the all-important US Federal Reserve interest rate decision due later in the day.
A new stage of Bitcoin's decline
Bitcoin's closing price on Tuesday became the lowest since late February, confirming the downward trend and falling under March and April support and the psychologically important round level.
ADP Employment Change Preview: US private sector expected to add 179K new jobs in April
The ADP report is expected to show the US private sector added 179K jobs in April. A tight labour market and sticky inflation support the Fed’s tight stance. The US Dollar seems to have entered a consolidative phase.