Forex Market: EUR/CAD daily outlook

During yesterday’s trading session EUR/CAD traded within the range of 1.5479-1.5583 and closed at 1.5490.

At 7:01 GMT today EUR/CAD was gaining 0.15% for the day to trade at 1.5514. The pair touched a session high at 1.5526 at 6:40 GMT.

Fundamental view

The surplus on Euro zones seasonally adjusted current account probably narrowed to 18.4 billion EUR in January, according to the median estimate of experts. In December the surplus figure was 21.3 billion EUR. The official numbers are to be released at 9:00 GMT.

In addition, the preliminary value of the compound index of economic sentiment (ESI) for the Euro zone probably improved to a reading of -12.3 during the current month from -12.7 in February. The European Commission is expected to publish the preliminary data at 15:00 GMT. This survey precedes the final reading by two weeks. A larger than projected improvement in the index would provide support to the single currency.

At the same time, Canadian retail sales probably rose 0.8% in January compared to a month ago, according to preliminary estimates, following a 1.8% decline in December. Core retail sales (excluding the volatile sales of automobiles) probably climbed 0.9% in January. The official report is scheduled for release at 12:30 GMT.

Retail sales are a key indicator, providing clues over the tendency in consumer spending in Canada. Better than expected sales figure would certainly support demand for the Canadian dollar.

Annualized consumer price inflation in Canada, on the other hand, probably slowed down to 0.9% in February from 1.5% in January.

Annualized core consumer price index (CPI), which excludes eight volatile components and indirect taxes, probably decelerated to 1.1% last month from 1.4% in January. The report is due out also at 12:30 GMT. If consumer inflation in the country accelerated more than what has been forecast by analysts and approached the inflation target set by Bank of Canada, the loonie is likely to be boosted.

Technical view

According to Binary Tribune’s daily analysis, in case EUR/CAD manages to breach the first resistance level at 1.5556, it will probably continue up to test 1.5621. In case the second key resistance is broken, the pair will probably attempt to advance to 1.5660.

If EUR/CAD manages to breach the first key support at 1.5452, it will probably continue to slide and test 1.5413. With this second key support broken, the movement to the downside will probably continue to 1.5348.