The Fed’s meeting minutes may be on tap, but today I’m keeping my eyes on a swing trade opportunity on EUR/CAD.
What do you think?
Before moving on, ICYMI, today’s Daily Asia-London Session Watchlist looked at AUD/JPY’s uptrend ahead of potential catalysts from Japan and Australia. Be sure to check that out to see if there is still a potential play!
And now for the headlines that rocked the markets in the last trading sessions:
Fresh Market Headlines & Economic Data:
- New Zealand PPI outputs rise 1.2% in Q1 2021
- Australia’s consumer sentiment pulls back from an eleven year high
- Australia Q1 wage growth dragged by public sector
- Oil falls on concerns of Iranian supply return, inflation fears
- BOJ’s Kuroda signals readiness to extend pandemic-aid scheme
- Bitcoin’s obstacles mount amid China cryptocurrency warning
- Asian shares slip, bitcoin tumbles as inflation worries linger
- U.K. inflation doubles as post-lockdown spending splurge starts
Upcoming Potential Catalysts on the Economic Calendar:
- U.K.’s house price index at 8:30 am GMT
- Canada’s inflation reports at 12:30 pm GMT
- FOMC’s meeting minutes at 6:00 pm GMT
What to Watch: EUR/CAD
Inflation concerns in the U.S. and other major economies could keep traders from taking risks today.
All eyes are on the Fed’s meeting minutes, which is expected to repeat the team’s confidence that increases in consumer prices are “transitory.”
So, unless we see surprises from the Fed, traders will likely trade the economic themes that we’ve been seeing this week.
Today I’ve got my eyes on EUR/CAD, which is testing the “neckline” of a potential reverse head-and-shoulders pattern.As you can see, its current levels also line up with a key support back in late March as well as the 100 SMA on the 4-hour time frame.
Recall that economic reopenings in the Eurozone have upped the demand for the euro this week. Meanwhile, talks of restoring the nuclear deal with Iran have somewhat weighed on crude oil prices and the Loonie.
Will we see a mid-week reversal for EUR/CAD? A lack of fresh catalysts may cause profit-taking for some euro bulls.
On the other side of the trade, Loonie bulls who have stayed away after hearing about Iran’s nuclear deal may come back and take comfort from a Russian diplomat already denying reports of a breakthrough on the deal.
Euro weakness or Loonie strength could cause EUR/CAD’s rejection at the 1.4765 resistance and drag the euro back down to 1.4725 or 1.4640.
But if EUR/CAD busts through the 100 SMA resistance, then we can look forward to a retest of the 1.4825 or even the 1.4950 areas of interest.