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The euro zone PMIs are up for release next, and strong results could support the idea that the region is due for a rebound.

Currency Snapshot:

Forex Majors Performance from MarketMilk
Forex Majors Performance from MarketMilk

Fresh Market Headlines & Economic Data:

Upcoming Potential Catalysts on the Forex Calendar:

  • French flash manufacturing and services PMIs due 8:15 am GMT
  • German flash manufacturing and services PMIs due 8:30 am GMT
  • Euro zone flash manufacturing and services PMIs due 9:00 am GMT
  • U.K. flash manufacturing and services PMIs due 9:30 am GMT
  • ECB head Lagarde’s testimony coming up
  • Canadian retail sales figures due 1:30 pm GMT

What to Watch: EUR/CAD

EUR/CAD 1-hour Forex Chart
EUR/CAD 1-hour Forex Chart

With small improvements eyed for euro zone leading indicators, I’m hoping to catch quick bounce for the shared currency in this session. On the flip side, expectations for another dip in Canadian retail sales figures could be enough to keep the Loonie on weak footing.

To top it all off, resurfacing uncertainty surrounding U.S.-China trade talks could keep a lid on gains for commodity currencies and the dollar, giving the euro its “safe-haven proxy” appeal back.

EUR/CAD has formed higher lows connected by a longer-term rising trend line and is also seeing lower lows from stochastic. This bullish divergence suggests that a bounce could happen at the 50% Fib level, but a larger correction could still take the pair to the 61.8% Fib around 1.4675.

EUR/CAD Moving Averages from MarketMilk
EUR/CAD Moving Averages from MarketMilk

Both the simple and exponential moving averages reflect a bullish trend for the pair. However, the upcoming data releases could still spur additional volatility, so preempting a move might be risky.

Scaling in might prove to be a better option, with an entry around current market levels and another on a larger correction to the 61.8% Fib. Waiting for the actual figures to be printed could also work out.