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.