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The European Central Bank press conference was the highlight of yesterday’s trading session. The central bank decided not to introduce any changes in interest rates as expected.

Interest rate decision helped the Euro currency to gain ground, but an hour later the ECB’s press conference ignited selling pressure. The pairs such as EURUSD, EURAUD and EURCAD moved lower. EURCAD dropped heavily during the ECB press conference.

Draghi Strikes

The official statement highlights that “the economic analysis confirms our expectation of a prolonged period of low inflation followed by a gradual upward movement in HICP inflation rates towards levels closer to 2%. A cross-check with the signals from the monetary analysis confirms the picture of subdued underlying price pressures in the euro area over the medium term”. Mario Draghi sounded more dovish than previous meetings, which caught the attention of Euro buyers. Draghi indirectly mentioned the possibility of QE and negative interest rates if the threat of disinflation increases. He clearly mentioned, “we don’t exclude further monetary-policy easing”.

EURCAD dived during the ECB press conference and tested an important support at around 1.5075 level, which also represent previous swing low.

Canadian unemployment report

During today’s US session, Canadian net change in employment, participation rate and unemployment rate will be published by the Statistics Canada. The market is expecting improvement in jobs created with unemployment rate is expected to remain steady around 7.0%. Any miss in outcome might boost EURCAD pair in the short term.

More: Trading the Non-Farm Payrolls with EUR/USD

Technical Analysis

EURCAD tested the previous support zone at 1.5075 level, which again helped the pair to regain ground. Earlier during the week, EURCAD sellers managed to breach an important bullish trend line connecting all previous major lows. Now, there are two descending trend lines forming on the 4 hour timeframe. If the pair manages to break first trend line, then buyers might attempt to push the pair towards the next trend line resistance zone. All three simple moving averages (200, 100 and 50) lies around the trend line highlighted.

There is a strong divergence noted on RSI, which suggest that the pair might retrace some of the recent losses in the short term. On the downside, 1.5075 support level must hold in order to prevent further losses in the pair.

Note chart is attached as post image