Friday’s trade saw EUR/CAD within the range of 1.3749-1.3965. The daily low has also been the lowest level since September 18th 2013. The pair closed at 1.3865, losing 0.32% on a daily basis.
At 8:22 GMT today EUR/CAD was down 0.18% for the day to trade at 1.3839. The pair touched a daily low at 1.3812 at 6:20 GMT.
Fundamentals
Euro zone
Current account
The surplus on Euro zone’s seasonally adjusted current account probably expanded to EUR 21.3 billion in November from EUR 20.5 billion in October. The latter has been the smallest surplus since June 2014, when a figure of EUR 18.6 billion was reported.
Region’s current account (without a seasonal adjustment) produced a surplus at the amount of EUR 30.6 billion in October. An all-time high current account surplus was registered at EUR 32.91 billion in December 2013.
The current account reflects the difference between savings and investments in the Euro area. It is the sum of the balance of trade, net current transfers (cash transfers) and net income from abroad (earnings from investments made abroad plus money sent by individuals working abroad to their families back home, minus payments made to foreign investors).
A current account surplus indicates that the net foreign assets of the region have increased by the respective amount, while a deficit suggests the opposite. A country/region with a surplus on its current account is considered as a net lender to the rest of the world, while a current account deficit puts it in the position of a net borrower. A net lender is consuming less than it is producing, which means it is saving and those savings are being invested abroad, or foreign assets are created. A net borrower is consuming more than it is producing, which means that other countries are lending it their savings, or foreign liabilities are created. An expanding surplus or a contracting deficit on the area’s current account usually has a bullish effect on the euro.
The European Central Bank is expected to release the official data at 9:00 GMT.
Construction output
At 10:00 GMT Eurostat is to report on construction activity in the Euro zone for November. Seasonally adjusted construction output in the region increased 1.3% in October compared to a month ago, following a 1.0% drop in September. In annual terms, output expanded at a pace of 1.4% in October, following a 2.0% contraction in September, or the most since October 2013, when activity shrank 2.4%. This indicator reflects how resilient construction sector development is and also provides clues over investment activity. Higher rates of increase in output usually provide a limited support to the common currency, while higher rates of decline usually have the opposite effect.
Canada
Foreign investment in Canadian securities
Foreign portfolio investment in Canadian securities probably shrank to CAD 7.23 billion in November, according to the median forecast by experts, from CAD 9.53 billion in October. This indicator reflects the flow of incoming investments in the local stock, bond and money markets. An increasing flow of foreign investments is usually related with a positive economic outlook for the country being invested in. This usually increases demand for its currency and vice versa. Therefore, in case portfolio investment in Canadian securities shrank more than anticipated, this would have a certain bearish effect on Canadas dollar. The official data by Statistics Canada is due out at 13:30 GMT.
Pivot Points
According to Binary Tribune’s daily analysis, the central pivot point for the pair is at 1.3860. In case EUR/CAD manages to breach the first resistance level at 1.3970, it will probably continue up to test 1.4076. In case the second key resistance is broken, the pair will probably attempt to advance to 1.4186.
If EUR/CAD manages to breach the first key support at 1.3754, it will probably continue to slide and test 1.3644. With this second key support broken, the movement to the downside will probably continue to 1.3538.
The mid-Pivot levels for today are as follows: M1 – 1.3591, M2 – 1.3699, M3 – 1.3807, M4 – 1.3915, M5 – 1.4023, M6 – 1.4131.
In weekly terms, the central pivot point is at 1.3935. The three key resistance levels are as follows: R1 – 1.4122, R2 – 1.4378, R3 – 1.4565. The three key support levels are: S1 – 1.3679, S2 – 1.3492, S3 – 1.3236.
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