EURCAD, H4 and Daily
Currency market participants have for the most part been directionally unambitious ahead of the US employment report, which, as always, brings potential to upset the apple cart of global market sentiment.
In Europe the focus remains on Brexit discussions in London, as the EU prepares for a no-deal scenario, with the EU leaders as well as the ECB holding meetings on April 10, two days ahead of the current exit date, which still stands, even if MPs in London voted against a no-deal scenario.
So far today in the currency market, EURUSD has hunkered down in the lower 1.1200s into the US jobs report, consolidating a 3-week bear phase that left a 1-month low at 1.1183, which was seen on Tuesday. The EURGBP has driven to yesterday’s highs.
Across all majors, Euro has been a winner so far today, and significantly against Kiwi and Canadian Dollar, in contrast with the yearly view. The recent downside bias for WTI after a 5-month high has been a boon for EURCAD, as it added further pressure on the Loonie. The pair also found some ground following the weekly EIA oil inventory report.
EURCAD broke above its 1-week high early today, at 1.5024, while the intraday picture presents a strong positive configuration of the momentum indicators. The indicators in the 4-hour chart rebounded from the oversold terrain, suggesting a potential boost if the pair sustains this week’s gains. RSI is at 57 and MACD present an elimination of the negative momentum.
As EURCAD has moved back over the 50-period EMA and the 38.2% Fib. retracmenet level since March 25 to April 1 downleg, at 1.5020, the next resistance now comes at the 1.5040 (R2 from PP analysis). The Support is at the 20-period SMA and the 23.6% Fib. level, at 1.4975.
Overall, a close above 1.5020 today, would improve the sentiment and would spot the 50% Fibonacci retracement level, which is also the confluence of 200-period EMA at 1.5060-1.5065.
Nevertheless, Canadian Labour data will be out, which could add some pressure to the EURCAD if they come in line or higher than forecasts.
A 10.0k gain is expected in jobs during March after the 55.8k gain in February that blasted through expectations. Today’s report is projected to reveal an unemployment rate that is running at 5.8%, matching the 5.8% in February.
Moreover, poor February weather (polar vortex) gave way to more seasonal conditions in March, supportive of jobs. Granted, the weather didn’t drag on Canada’s job market like in the US, so a weather rebound is perhaps less likely.
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Andria Pichidi
Market Analyst
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