It was all about risk sentiment for Asian session traders as they priced in weaker stimulus prospects in the U.S.
Will this lead to EUR/CAD retesting a key inflection point?
Check out the top market headlines in the last couple of hours:
- U.S. crude, fuel stockpiles drop sharply amid hurricane: EIA
- Fed’s Quarles: more reforms likely needed in short-term funding markets
- ECB sees little reason to rush into new stimulus this month
- Lagarde: Arsenal of economic stimulus on standby amid upsurge of coronavirus cases in Europe
- Mnuchin says Trump to lean on McConnell if stimulus deal reached
- WHO study says remdesivir did not cut hospital stay or mortality in COVID-19 patients
- Fujifilm seeks approval for Avigan as COVID-19 treatment in Japan
- Japan to tap budget reserves worth $5.2B to protect jobs, supply chains
- New Zealand manufacturing activity picks up in September
- Asian shares retreat as coronavirus surge hits sentiment
- Australian, New Zealand dollars poised for weekly losses
- Dollar heads for weekly gain as pandemic recovery stalls
Upcoming Potential Catalysts on the Economic Calendar:
- Eurozone’s final inflation figures at 9:00 am GMT
- Eurozone’s trade balance at 9:00 am GMT
- Italy’s trade balance at 9:00 am GMT
- Canada’s manufacturing sales at 12:30 pm GMT
- U.S. retail sales at 12:30 pm GMT
What to Watch: EUR/CAD
Optimism over a Brexit deal and concerns over a lack of stimulus deal in the U.S. has pushed the euro higher against the Loonie in the last few days.
EUR/CAD is now sitting just under the 1.5500 mark, which lines up with the 38.2% Fib retracement of early October’s downswing.
Data releases are pretty low key in the eurozone today with only trade balance and inflation reports on tap. Meanwhile, Canada is expected to print a 2.0% decline in manufacturing sales after seeing a 7.0% jump in July.If traders start to really worry about the EU still not having a concrete deal with the U.K., or if they pay more attention to rising coronavirus cases and lockdown prospects in the region, then EUR/CAD could find resistance at current levels and head for its previous lows near 1.5400.
If comdolls continue to take hits against their lower-yielding counterparts, however, then we could see EUR/CAD retest 1.5550, which is in line with a 61.8% Fib retracement and a key broken support area.