Technical Bias: Bullish
Key Takeaways
“¢ Euro awaits the European central bank Present Mario Draghi for further action.
“¢ Euro gained against the US dollar, but struggled to climb against the Canadian dollar.
“¢ EURCAD looks poised for gains moving ahead if it manages to clear 200 SMA (4H).
Euro found dip buyers after the aftermath of the FOMC minutes, but laggard in Asia against the Canadian dollar as the latter one continued to be well bid.
ECB President Draghi is Next
Euro traders are getting ready for action as the ECB President Mario Draghi is scheduled to speak today. His main concern as of now is that recent reports released in Germany pointing that the economy is grinding to a halt and might be heading into recessions. He has done well until now to lower the Euro and interest rates. However, the impact of his update on the asset buying plan last week was very low, which increases pressure in the short term as he cannot afford inflation expectations to become unanchored.
Technical Analysis
There is an ascending channel formed on the 4 hours chart of EURCAD, which recently acted as a hurdle for the Euro buyers. The most important thing is that the mentioned channel resistance area is coinciding with the 200 SMA (4H) making it a significant barrier for buyers. EURCAD kept finding plenty of buying interest along the 1.4130/20 level, which is aligned with the 100 SMA (4H). The Canadian dollar continued to be well bid, moving further away from the channel resistance against the Euro. Nevertheless we appear to have more clearly entered a period of consolidation in EURCAD until it breaks higher or lower.
On the upside, the highlighted resistance area is around 1.4200, followed by the 1.4240 level. A break above the highlighted area might call for a move towards 1.4300. On the downside, initial support is around the 100 and 50 SMA’s, followed by the channel support trend line.
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