We might see some profit-taking ahead of the Thanksgiving holidays, and it looks like this inflection point on EUR/CAD could hold.
Thinking of taking this trend setup? Check out the top headlines that dominated Asian trading first:
- Department of Energy posts surprise reductions in crude oil and natural gas storage
- FOMC minutes: Officials discussed possible adjustments to bond purchases
- FOMC minutes: “Many participants judged that the Committee might want to enhance its guidance for asset purchases fairly soon.”
- New Zealand trade deficit narrowed from 1025M NZD to 501M NZD
- Australian private capital expenditure sank 3% in Q3 vs. projected 1.5% drop
- Bank of Korea threatens to intervene if won keeps rising
- South Korea reported biggest spike in COVID-19 cases since March
Upcoming Potential Catalysts on the Economic Calendar:
- German GfK consumer climate at 8:00 am GMT
- ECB meeting minutes at 10:00 am GMT
What to Watch: EUR/CAD
Market movements have been pretty calm over the past few hours as traders are gearing up for the Thanksgiving holidays.This could mean some profit-taking off earlier moves, such as the latest pop higher for EUR/CAD. You see, the pair has been cruising inside a falling channel on its 1-hour chart and is now testing the resistance.
Technical indicators suggest that the selloff could carry on, as Stochastic just reached the overbought territory while the 100 SMA is below the 200 SMA.
If the ceiling holds, EUR/CAD could retreat to the channel bottom near 1.5400 or at least until the mid-channel area of interest. There are a couple of low-tier catalysts from the eurozone in the next session, namely the German Gfk consumer climate index and the release of the ECB minutes.
A break past the resistance, on the other hand, could be followed by a reversal from the downtrend. Better check out the average EUR/CAD volatility if you’re trading this one!