Forex Market: EUR/CAD daily forecast

During yesterday’s trading session EUR/CAD traded within the range of 1.4520-1.4572 and closed at 1.4566.

At 8:45 GMT today EUR/CAD was losing 0.11% for the day to trade at 1.4550. The pair touched a daily low at 1.4548 at 8:45 GMT.

Fundamental view

Euro zone

Annualized retail sales in the Euro region as a whole probably rose 2.0% in May, according to the median forecast by experts, after in April sales climbed 2.4%. In monthly terms, retail sales probably increased 0.3% during May. This is a short-term indicator, which provides key information about consumption on a national scale. In case the index of retail sales rose 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 (ECB) is to announce its decision in regard to borrowing costs. The median estimate by experts suggests that the central bank will probably maintain its benchmark interest rate at the record low level of 0.15% at the policy meeting today. The ECB cut borrowing costs by 0.10% at its prior meeting on June 5th. Short-term interest rates are of utmost importance for the valuation of national currencies. In case the central bank is dovish about inflationary pressure in Euro zones economy and thus, either puts interest rates on hold, or reduces them, this will usually have a bearish effect on the common currency.

The interest rate decision is to be followed by the press conference with ECB President Mario Draghi, at which he takes a statement on monetary policy. During this event volatility of euro crosses is usually high. In case Draghi offers a more hawkish tone, the euro will usually receive support, while a more dovish tone will have a bearish effect on the currency. The press conference is scheduled at 12:30 GMT.

Canada

The deficit on Canadian trade balance probably contracted to 0.300 billion CAD during May from 0.638 billion CAD in the prior month. The trade balance, as an indicator, measures the difference in value between nation’s exported and imported goods and services during the reported period. It reflects the net export of goods and services, or one of the components to form country’s Gross Domestic Product. Exports probably increased to 43.00 billion CAD in May from 42.83 billion CAD in April. Generally, exports reflect economic growth, while imports indicate domestic demand. In case the trade balance deficit shrank more than expected, this would provide support to Canadian dollar. Statistics Canada will release the official figure at 12:30 GMT.

Technical view

According to Binary Tribune’s daily analysis, in case EUR/CAD manages to breach the first resistance level at 1.4585, it will probably continue up to test 1.4605. In case the second key resistance is broken, the pair will probably attempt to advance to 1.4637.

If EUR/CAD manages to breach the first key support at 1.4533, it will probably continue to slide and test 1.4501. With this second key support broken, the movement to the downside will probably continue to 1.4481.