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I’m seeing a textbook break-and-retest setup forming on the short-term chart of this pair.

Any major reports that could spur a bounce in the next few hours?

I have a few ideas, but we’ll probably understand today’s catalysts better by reviewing the top headlines in the late U.S. and early Asian sessions:

Major Forex Pairs Price Performance from MarketMilk
Major Forex Pairs Price Performance from MarketMilk

Upcoming Potential Catalysts on the Economic Calendar:

  • German factory orders at 8:00 am GMT
  • Italian retail sales at 10:00 am GMT
  • U.K. construction PMI at 10:30 am GMT
  • BOE MPC member Tenreyro to testify at 10:30 am GMT

What to Watch: EUR/CAD

EUR/CAD 1-hour Forex Chart
EUR/CAD 1-hour Forex Chart

This pair is currently in the middle of a correction to an area of interest visible on the 1-hour chart. Price is testing the 38.2% Fib but could still be due for a dip to the resistance-turned support closer to the 1.5600 handle.

This happens to be closely in line with the 50% Fib and the 100 SMA dynamic support. Also, 100 SMA is safely above the 200 SMA to confirm that bulls are likely to defend these support levels.

At the same time, a bullish divergence is showing up as Stochastic formed lower lows while price had higher lows.

Loonie bulls came out after the OPEC+ agreed to curb production, but it looks like the amount is smaller than what most market participants expected.

Traders might also be keen to book profits off these long CAD positions ahead of the release of Canada‘s jobs figures later in the day, as the economy is expected to print a slowdown in hiring.

Meanwhile, the euro has the German factory orders report to contend with, along with updates on Brexit negotiations.