Forex Market: EUR/CAD daily forecast

During yesterday’s trading session EUR/CAD traded within the range of 1.4894-1.4962 and closed at 1.4936.

At 6:27 GMT today EUR/CAD was losing 0.12% for the day to trade at 1.4918. The pair touched a daily low at 1.4910 at 6:00 GMT.

Fundamental view

Euro zone

The advance (preliminary) manufacturing Purchasing Managers’ Index (PMI) in the Euro zone probably slowed down to 53.2 in May, from a final reading of 53.4 in the previous month, according to the median forecast by experts.

The index is based on a monthly survey, which includes carefully selected companies that are representative of the state of the private sector in the economy and track the changes in production, new orders, market share, employment and prices in the manufacturing sector. The PMI is the first economic indicator for each month, providing information on the changing economic conditions, significantly earlier than the official state statistics. It is presented as a scale from 1 to 100. Readings above 50 are connected with a positive outlook for economic growth. Conversely, values ​​below 50 indicate a less optimistic forecast. This is a preliminary value of the indicator.

The research group Markit Economics will release the official figures at 8:00 GMT. A higher-than-expected reading would certainly boost demand for the 18-nation common currency.

In addition, the advance (preliminary) reading of Germany’s Services PMI probably slowed down to 54.5 in May, according to the median analysts’ estimate. In April, the index came in at 54.7. The official reading is to be released at 7:30 GMT.

Moreover, the advance (preliminary) reading of Euro zone’s Services PMI probably slowed down to 53.0 this month, after the index came in with a final reading of 53.1 in April. In case market expectations are exceeded, this will boost demand for the single currency. Markit Economics will report the official value at 8:00 GMT.

Canada

Retail sales in Canada probably rose by 0.3% in March, after a 0.5% increase in the previous month, according to the median analysts’ estimate.

Retail sales are a key monthly indicator of consumer purchases in Canada. In addition, retail sales are an important component of GDP, which measures the overall production of the Canadian economy. The index does not include any form of direct sales, such as sales door-to-door, vending coffee, sale of newspapers or magazines directly from the printing office or publisher sales made ​​through subscription or club cards. Retail sales made ​​over the Internet are included in the study only when held to the same legal scheme. This is the percentage change from the previous month.

Retail sales excluding autos in Canada probably jumped by 0.3% in March, following a 0.6% gain in the previous month, according to the median forecast by experts.
The index presents the changes in the total value of retail sales without the cars, whose sales account for about 20% of the total. They are excluded due to their high volatility, which can significantly affect the overall trend. Data without car sales is considered to be more representative and determines the direction of development of the indicator more precisely. This is the percentage change from the previous month.

Statistics Canada will release official data at 12:30 GMT. Higher-than-expected gains will certainly provide support to loonie’s demand.

Technical view

According to Binary Tribune’s daily analysis, in case EUR/CAD manages to breach the first resistance level at 1.4967, it will probably continue up to test 1.4999. In case the second key resistance is broken, the pair will probably attempt to advance to 1.5035.

If EUR/CAD manages to breach the first key support at 1.4899, it will probably continue to slide and test 1.4863. With this second key support broken, the movement to the downside will probably continue to 1.4831.