EURCAD Languid Ahead of ECB Conference and OPEC Meeting
Data released on Monday reported that the EU economy remained pretty weak and signals for a strong recovery are not clearly evident yet.
The Federal Statistical Office (Destatics) today reported that the index of Germany import prices in April fell by 0.1% from the preceding month, instead of increasing 0.4% as expected by analysts. On a yearly basis, the index decreased by 6.6% while export prices dropped by 2.0%. The annual growth rates of both import and export prices have witnessed declines for the past three consecutive months.
In France, the consumer spending index (m/m) witnessed a plunge of 0.1% in April. This data was contrary to expectations for a 0.1% increase in household expenditure on goods. Meanwhile, the National Statistics Institute (INE) reported that flash Consumer Price Index (CPI) for May in Spain slumped by 1.0%, falling further from the previous drop of 1.1% in April.
Due to the slowdown in its member economies, the euro area does not seem to currently highlight any bright prospects of a recovery soon. Hence, the common currency seems to be gingerly before the ECB Press Conference on June 02.
Meanwhile, Canada’s economy has been suffering from the raging wildfires for several weeks now. Oil producers have not been able to operate, thus stealing away a large part of the economy’s exports. Also, ahead of OPEC meeting on June 02, oil prices have been moving in unclear fashion, after hitting a seven-month high, as concerns of whether any supply-cut can be implemented at all, remain on the radar. Being a commmodity reliant currency, the Canadian dollar has been affected adversely by the overall fall in oil prices over the past months and years.
The market is looking forward to the upcoming data releases from Canada that are on schedule. The Raw Materials Price Index (RMPI) in April is forecast to increase only 2.2%, well below the growth rate of 4.5% in the preceding month. Nevertheless, the Industrial Product Price Index is expected to inch up 0.2% in April, after sliding 0.6% previously.
Fig. EURCAD D1 Technical Chart
EURCAD has been fluctuating in an uncertain fashion for several days, after testing the resistance of 1.48253. Currently, the Loonie is weakening against the Euro, with the EURCAD at 1.45313. The stochastics chart shows that the pair may escape from the oversold zone as the %K line (blue line) has already reversed and crossed the %D line (red line). The price is expected to retest the current resistance at 1.48253.
Buy stop at 1.45915, Stop loss at 1.44493, Take profit at 1.47070