Bounce or break? This pair is testing a key inflection point and could be due for either a continuation or reversal of the trend soon.
A couple of economic events in the eurozone might be worth paying attention to ahead of Canada’s retail sales report.
Before I show you guys this neat setup on EUR/CAD, you might want to read up on the major headlines during the Asian session:
- Fed at odds with U.S. Treasury on emergency funds
- Treasury Secretary Mnuchin denied extension of Fed aid programs
- Georgia affirms Biden victory, Michigan and Pennsylvania to follow
- South Korea warns of tougher measures to fight third COVID-19 wave
- U.S. crude oil storage approaching 80% capacity
- U.S. natural gas storage rose by 31 Bcf vs. 22 Bcf forecast
- Japanese national core CPI down 0.7% as expected
- U.K. GfK consumer confidence index dipped from -31 to -33
- Australian retail sales up 1.6% after earlier 1.1% drop
- Japanese flash manufacturing PMI slipped from 48.7 to 48.3
- New Zealand credit card spending fell 6.3% after earlier 9.8% drop
Upcoming Potential Catalysts on the Economic Calendar:
- German PPI at 8:00 am GMT
- U.K. retail sales at 8:00 am GMT
- ECB head Lagarde’s speech at 9:15 am GMT
What to Watch: EUR/CAD
This pair has formed lower highs and lower lows to cruise inside a falling channel on the short-term time frame.Price is currently testing the top of the channel, still deciding whether to head back down or to make a break for it. Technical indicators appear to be hinting at an upside move.
Stochastic is closing in on the oversold region to signal exhaustion among sellers while the moving averages made a bullish crossover to reflect a pickup in bullish momentum.
Only a couple of mid-tier catalysts are due from the eurozone next, so traders might rather keep tabs on the developments (or lack thereof) in Brexit talks.
Any signs of progress could be bullish for the European currency, but a standstill could keep traders on the lookout for other potential market movers. The next major one for the day is the Canadian retail sales report, which is slated to show weaker spending numbers.