EURCAD Forex Forecast – Ready to Test Channel Resistance

EURCAD Forex Forecast - Ready to Test Channel ResistanceEURCAD is still moving inside its descending channel visible on the pair’s 4-hour time frame. Price is moving closer to the channel resistance around the 1.4450 minor psychological mark and 200 SMA.
The 100 SMA appears to be holding as near-term resistance for the time being but stochastic is still pointing up, hinting that a larger rally could be in the cards. In that case, the pair has enough bullish momentum to make a test of the channel resistance.
The 100 SMA is below the longer-term 200 SMA so the path of least resistance is to the downside. If the resistance levels hold, price could hit the channel support at the 1.4100-1.4150 area.
Data from Canada came in mixed yesterday, with building permits showing a surprise 1.9% drop and the Ivey PMI showing a strong return to industry growth. However, the Loonie took its cue from the drop in oil prices even as the US crude oil inventories showed a draw of 2.2 million barrels.
Still, improving oil market fundamentals could keep the Loonie supported against its counterparts. Aside from that, the upcoming Canadian jobs release could print an upside surprise, based on the employment component of the Ivey PMI. Analysts are expecting to see a gain of 5.5K in hiring but the jobless rate could rise from 6.9% to 7.0%.
There are no major reports lined up from the euro zone today, although the German trade balance and French industrial production could provide some volatility. The possibility of additional ECB easing due to a Brexit might also keep weighing on the shared currency.
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Samuel Rae is an active retail trader across a variety of assets, including currencies, stocks and commodities and the author of Diary of a Currency Trader (Harriman House). His personal strategy focuses primarily on classical technical charting patterns with a fundamentally supportive bias, combined with a strict, risk management-driven approach to entries and exits. He is an Economics graduate from Manchester University, UK.