Forex Market: EUR/CAD daily trading forecast

Yesterday’s trade saw EUR/CAD within the range of 1.4208-1.4351. The pair closed at 1.4254, gaining 0.04% on a daily basis.

At 8:07 GMT today EUR/CAD was down 0.05% for the day to trade at 1.4246. The pair touched a daily low at 1.4221 at 3:25 GMT.

Fundamentals

Euro area

Services PMIs

Services sector in Spain probably registered higher activity in January, with the respective Purchasing Managers Index climbing to 54.9, according to expectations, from 54.3 in December. If so, this would be the highest PMI value since October 2014, when the indicator was reported at 55.9. The official value for January is due out at 8:15 GMT.

Activity in Italys sector of services probably improved in January, with the corresponding PMI coming in at a reading of 50.0, as expected by experts, from 49.4 in the prior month. The latter has been the lowest PMI value since September 2014, when the index stood at 48.8. Markit Economics is expected to release the official data at 8:45 GMT.

Frances final services PMI probably confirmed the preliminary PMI reading of 49.5 in January, which was reported on January 23rd. In December the final services PMI was estimated at 50.6, or the highest level since March 2014, when the indicator came in at a final 51.5. The official reading is due out at 8:50 GMT.

The final reading of German services PMI probably confirmed the preliminary value for January, with the index coming in at 52.7, according to market expectations. If confirmed, this would be the highest PMI reading since October 2014, when the gauge was reported at a final 54.4. In December the final services PMI was registered at 52.1, up from a preliminary value of 51.4. The index is based on data collected from a representative panel of more than 500 companies, operating in Germanys services sector, and gauges variables such as sales, employment, inventories and prices. Markit will release the official reading at 8:55 GMT.

The final services PMI in the Euro area probably also confirmed the preliminary value for January, with the index remaining at 52.3. If confirmed, this would be the highest level since October 2014, when the PMI stood at a final 52.3. In December the index came in at 51.6, according to final data. The Purchasing Managers Index is based on a monthly survey, encompassing a sample of approximately 2 000 business entities, which represents private sector conditions in terms of new orders, output, employment, prices etc. National services data are included for Germany, France, Italy, Spain and the Republic of Ireland. Readings above the key level of 50.0 indicate optimism in regard to activity. Higher-than-expected values of any of the above mentioned PMIs would support demand for the single currency. The official reading for the whole region is scheduled to be released at 9:00 GMT.

Retail sales

Annualized retail sales in the Euro region as a whole probably rose 2.0% in December, according to the median forecast by experts, after in November sales climbed at a pace of 1.5%. If so, this would be the 13th consecutive period of growth and also the most significant one since March 2007. In monthly terms, retail sales probably increased 0.2% during December, following a 0.6% gain in November. This is a short-term indicator, which provides key information about consumer spending trend on a national scale. In case the index of retail sales rose at a faster-than-projected pace, this would have a bullish effect on the euro. Eurostat is expected to publish the official data at 10:00 GMT.

Canada

Ivey PMI

Activity among purchasing managers in Canada probably continued to slow down in January, with the correspoding seasonally adjusted PMI coming in at a value of 53.9. However, this would be the seventh consecutive month, during which the indicator inhabited the area above the 50.0 level. In December the index stood at 55.4. This indicator is based on a survey sponsored by Richard Ivey School of Business and Canadian Purchasing Management Association. It encompasses 175 respondents in both public and the private sector, selected in accordance with their geographic location and activity, so that the entire economy is covered. Activity among purchasing managers is closely watched by market players, as managers usually have an early access to data regarding performance of their companies, which could be used as a leading indicator of overall economic activity. Readings above the key level of 50.0 are indicative of optimism (expansion in activity). In case the PMI demonstrated a larger slowdown than expected, this would reduce demand for the Canadian dollar. The official index value is due out at 15:00 GMT.

Pivot Points

According to Binary Tribune’s daily analysis, the central pivot point for the pair is at 1.4271. In case EUR/CAD manages to breach the first resistance level at 1.4334, it will probably continue up to test 1.4414. In case the second key resistance is broken, the pair will probably attempt to advance to 1.4477.

If EUR/CAD manages to breach the first key support at 1.4191, it will probably continue to slide and test 1.4128. With this second key support broken, the movement to the downside will probably continue to 1.4048.

The mid-Pivot levels for today are as follows: M1 – 1.4088, M2 – 1.4160, M3 – 1.4231, M4 – 1.4303, M5 – 1.4374, M6 – 1.4446.

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.