Friday’s trade saw EUR/CAD within the range of 1.4270-1.4494. The daily high has also been the highest level since December 17th, when a high of 1.4566 was recorded. The pair closed at 1.4372, surging 0.62% for the day, while marking a fifth consecutive daily gain. The cross appreciated 3.25% for the whole week, which marked a second consecutive weekly gain.
Fundamentals
Euro area
Manufacturing data
Spanish Manufacturing Purchasing Managers Index (PMI) probably showed a slight improvement in January, coming in at a reading of 54.2 from 53.8 in December. If so, this would be the 14th consecutive month, when the PMI remains in the zone above 50.0, indicating optimism (increasing activity). The official reading is to be published at 8:15 GMT on Monday.
Activity in Italys sector of manufacturing probably improved in January, with the corresponding PMI rising to 49.0, as expected by experts. In December the PMI plunged to 48.4, which has been the lowest reading since May 2013, when the gauge was reported at 47.3. Markit Economics is expected to release the official data at 8:45 GMT.
Frances final manufacturing PMI probably remained in the zone of contraction for a ninth consecutive month during January, while confirming the preliminary PMI reading of 49.5, which was reported on January 23rd. In December the PMI came in at a final value of 47.5, which has been the lowest level since August 2014, when the gauge was reported at 46.9. The final PMI data is due out at 8:50 GMT.
The final reading of German manufacturing PMI probably confirmed the preliminary value for January, with the index coming in at 51.0. In December the final PMI stood at 51.2, also confirming the preliminary reading. Markit will release the final PMI data at 8:55 GMT.
The final manufacturing PMI in the Euro zone probably also confirmed the preliminary value in January, with the index remaining at 51.0. If so, this would be the highest level since July 2014, when the indicator was reported at a final 51.8. In December the final PMI was registered at 50.6. The PMI reflects the performance of the manufacturing sector in the Euro area and is based on a survey of 3 000 manufacturing companies. National data are included for Germany, France, Italy, Spain, the Netherlands, Austria, the Republic of Ireland and Greece. These member states together account for almost 90% of the Euro zones manufacturing activity. The Manufacturing Purchasing Managers Index is comprised by five individual indexes with the following weights: New Orders (30%), Output (25%), Employment (20%), Suppliers’ Delivery Times (15%) and Stock of Items Purchased (10%), as the Delivery Times index is inverted, so that it moves in a comparable direction.
In case the final PMI readings exceeded expectations, the common currency would receive a boost. The official manufacturing data for the Euro region as a whole is scheduled to be released at 9:00 GMT.
Canada
RBC Manufacturing PMI
Canadian Manufacturing PMI probably slowed down to 52.3 in January, according to the median analysts’ estimate, from 53.9 in the prior month. If so, this would be the lowest PMI reading since May 2014, when the Purchasing Managers Index was registered at 52.2.
The PMI report is based on data collected from monthly replies to questionnaires sent to supply managers in over 400 industrial companies. The PMI is a compound index based on five individual indexes: new orders, production, employment, delivery time, stocks of purchases. Values of the index above the key level of 50.0 indicate overall increase in activity in the sector, while readings below 50.0 are indicative of contraction in activity. PMIs are earlier indicators of economic conditions published on a monthly basis and are available much before the publication of relevant data from government authorities. This way they provide earlier insight about economic development trends. In case activity in the sector slowed down more than expected, this would have a bearish effect on the loonie. Royal Bank of Canada (RBC) will release the official PMI data at 14:30 GMT.
Pivot Points
According to Binary Tribune’s daily analysis, the central pivot point for the pair is at 1.4379. In case EUR/CAD manages to breach the first resistance level at 1.4487, it will probably continue up to test 1.4603. In case the second key resistance is broken, the pair will probably attempt to advance to 1.4711.
If EUR/CAD manages to breach the first key support at 1.4263, it will probably continue to slide and test 1.4155. With this second key support broken, the movement to the downside will probably continue to 1.4039.
The mid-Pivot levels for Monday are as follows: M1 – 1.4097, M2 – 1.4209, M3 – 1.4321, M4 – 1.4433, M5 – 1.4545, M6 – 1.4657.
In weekly terms, the central pivot point is at 1.4230. The three key resistance levels are as follows: R1 – 1.4636, R2 – 1.4901, R3 – 1.5307. The three key support levels are: S1 – 1.3965, S2 – 1.3559, S3 – 1.3294.
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