It’s a relatively light economic schedule for the London session, with low-tier leading indicators possibly setting the tone for EUR/CAD price action.
Currency Snapshot:
Fresh Market Headlines & Economic Data:
- New Zealand’s jobless rate up from 4.1% to 4.2% in Q3
- API crude oil stockpiles revealed larger than expected build
- U.S.-China trade agreement still not a done deal as Beijing increases demands
- BOJ debated feasibility of more easing in September: minutes
- Japanese service sector output declines for first time in over three years
Upcoming Potential Catalysts on the Forex Calendar:
- German factory orders at 7:00 am GMT
- German and French final services PMIs at 8:50 am GMT
- FOMC member Evans’ testimony at 1:00 pm GMT
- Canadian Ivey PMI at 3:00 pm GMT
What to Watch: EUR/CAD
The fresh set of tensions concerning the potential trade deal between the U.S. and China could weigh on risk-taking in the next few hours. The larger build in API crude oil inventories could also drag the oil-related Loonie further south.
EUR/CAD has been pacing back and forth inside a range visible on its 4-hour time frame and is currently hanging out at the area of interest right in the middle. Stochastic is indicating oversold conditions, hinting that support is more likely to hold than to break.
If so, the pair could bounce to the top of the range close to the 1.4700 handle. A break below current levels could set off a slide to the range bottom at 1.4455.
Upcoming German factory orders data suggests more favorable odds for euro bulls as a rebound is expected. Besides, the shared currency typically enjoys some safe-haven demand in risk-off situations.
This pair is expected to move roughly 20 pips per hour in the next few hours, so setting a stop of at least 80 pips could be enough to weather the volatility for this setup.