EURCAD Is The Certainly
Assessing the charts ahead of the weekend, the current price action in EURCAD is worth discussing. Following the heavy sell off over September, the pair has been range bound within a tight block of consolidation over the last month. In line with the longer term downtrend, looking to sell a break of the lows for a continuation lower is the preferred play. However, in the near term we might first of all see some counter trend long opportunities develop.
Looking at the last block of consolidation within this downtrend (highlighted) we can see that price was in a similar state and saw several attempted break outs to the upside before the downtrend reversed. Notably, looking at retail positioning we can see that long positions have start to reduce which, if this theme continues, might pave the way for a pop higher. To the topside, bulls can trade a break of 1.4460, targeting a retest of the broken 1.4616 lows. Any retest of this area can then be monitored for longer term short trades in line with the broader trend.
Key Data to Watch
Looking ahead to next week, the key data to watch will be Eurozone and Canadian CPI, both due into the middle of the week. Given the hawkish BOC expectations, any upside strength in CPI will likely driver EURCAD lower. Any CAD CPI miss, however, will likely see EURCAD trade higher near term. Additionally, focus is likely to be on oil prices. If oil prices continue to come off near term, this is likely to weigh on CAD, creating room for a move higher in EURCAD.
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With 10 years of experience as a private trader and professional market analyst under his belt, James has carved out an impressive industry reputation. Able to both dissect and explain the key fundamental developments in the market, he communicates their importance and relevance in a succinct and straight forward manner.