Forex Market: EUR/CAD daily forecast

During yesterday’s trading session EUR/CAD traded within the range of 1.4866-1.4919 and closed at 1.4886.

At 6:38 GMT today EUR/CAD was gaining 0.12% for the day to trade at 1.4895. The pair touched a daily high at 1.4906 at 6:08 GMT.

Fundamental view

Euro zone

Annualized retail sales in the Euro region as a whole probably rose 1.2% in April, according to the median forecast of experts, after in March sales climbed 0.9%. In monthly terms, retail sales probably remained flat in April. This is a short-term indicator, which provides key information about consumption on a national scale.

In case the index of retail sales rises at a faster than projected pace, this would have a bullish effect on the euro. Eurostat is expected to publish the official data at 9:00 GMT.

At 11:45 GMT the European Central Bank will announce its decision on borrowing costs. The benchmark interest rate will probably be cut to 0.1% from 0.25% at the policy meeting, according to the median estimate by experts. A cut in rates would have a bearish effect on the 18-nation common currency.

The decision on policy will be followed by a press conference with ECB President Mario Draghi, scheduled at 12:30 GMT. Market volatility during this event is usually high.

Canada

The number of building permits in the country probably rose 4.0% in April compared to a month ago, according to the median estimate by experts. In March permits issued by the government unexpectedly declined 3.0%. Building permits, as an indicator, provide information regarding demand in Canada’s housing market. A higher than anticipated number would be supportive for the Canadian dollar. Statistics Canada is to release its monthly report at 12:30 GMT.

Activity among purchasing managers in Canada probably increased in May, with the corresponding PMI coming in at a seasonally adjusted value of 58.4. In April the index stood at 54.1.

This indicator is based on a survey sponsored by Richard Ivey School of Business and Canadian Purchasing Management Association. It encompasses 175 respondents in both public and the private sector, selected in accordance with their geographic location and activity, so that the entire economy is covered. Activity among purchasing managers is closely watched by market players, as managers usually have an early access to data regarding performance of their companies, which could be used as a leading indicator of overall economic activity.

Readings above the key level of 50.0 are indicative of expansion in activity. Higher than expected readings of the PMI would bolster demand for the loonie. The official result is due out at 14:00 GMT.

Technical view

According to Binary Tribune’s daily analysis, in case EUR/CAD manages to breach the first resistance level at 1.4915, it will probably continue up to test 1.4943. In case the second key resistance is broken, the pair will probably attempt to advance to 1.4968.

If EUR/CAD manages to breach the first key support at 1.4862, it will probably continue to slide and test 1.4837. With this second key support broken, the movement to the downside will probably continue to 1.4809.