I’m still looking at this neat range setup on EUR/CAD this time as inflection points seem to be holding up quite well!
This pair tested the range resistance last week then turned back down, and price is now closing in on the bottom again.
Will we see another bounce or is EUR/CAD ready for a breakout?
Before we check out the chart, read the major headlines that influenced price action during the Asian session!
Currency Snapshot
Fresh Market Headlines & Economic Data:
- U.K. BRC retail sales monitor up from 5.7% to 7.9% vs. 3.0% forecast
- Japanese average cash earnings dipped 0.6% vs. projected 1.0% drop
- New Zealand ANZ business confidence index up from -41.8 to -33.0
- Australia’s NAB business confidence index up from -45 to -20
- Australian job advertisements picked up by 0.5% after earlier 53.4% slump
- WHO: COVID-19 pandemic far from over, daily cases reach new record high
- Australia revises foreign investment laws for national security
- China issues warning to citizens visiting Australia
Upcoming Potential Catalysts on the Economic Calendar:
- Swiss jobless rate at 6:45 am GMT
- German trade balance at 7:00 am GMT
- Japanese preliminary machine tool orders at 7:00 am GMT
- French trade balance at 7:45 am GMT
- Euro zone final employment change at 10:00 am GMT
What to Watch: EUR/CAD
EUR/CAD is still sitting pretty inside its range visible on the 1-hour time frame after just having bounced off the top recently.
In the absence of major catalysts in the London session, inflection points could simply keep holding. If so, EUR/CAD could recover back to the range resistance once more.The euro could have some bullish vibes on its side as stimulus efforts from the ECB and German government could keep the shared currency afloat. Meanwhile, a return in risk aversion could dampen the Loonie’s spirits now that the WHO has declared that the pandemic is far from over.
A continuation of risk-taking, on the other hand, could spur a breakdown and a selloff that’s at least the same height as the range.
Either way, don’t forget to check out the average EUR/CAD volatility when setting stops and targets!