EUR/CAD - The Pair to Short-Term Range Trade

Commercial Content Analysts
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The EURCAD has shown hesitation in crossing below previous spike-lows, with recent positioning data supportive of EUR strength and a CAD pullback. As such, we look to play the medium term range on the pair, with a stop loss to allow for significant intraday volatility.


[B]Trading Tip - The EURCAD has shown hesitation in crossing below previous spike-lows, with recent positioning data supportive of EUR strength and a CAD pullback. As such, we look to play the medium term range on the pair, with a stop loss to allow for significant intraday volatility. Of course, position size should be adjusted downward to limit the risk to a single currency pair’s movements. Initial profit targets are eyed near previous resistance at the psychologically significant 1.4400 mark, but a break above eyes further extension towards 1.4550 and eventually 1.4643. [/B]
[B]Event Risk Euro Zone and Canada[/B]
[B]Euro-zone[/B] - The biggest event risk out the Euro-zone comes early this week, with the German ZEW survey of investor sentiment likely to deteriorate further, as rocky financial markets and a tough policy stance by the central bank could leave respondents jittery. Later in the week, PMI figures for the manufacturing and services sector are both anticipated to soften slightly, but unless the index readings are very surprising, the Euro is not likely to show a strong reaction.
[B]Canada [/B]- Upcoming economic event risk will prove important for the Canadian dollar with a combination of key Consumer Price Index data and a later Retail Sales report. Both events are very likely to force large movements in the currency, with the future of the Bank of Canada interest rate policy hanging in the balance. Markets had earlier expected the BoC to raise interest rates through year end, but it has subsequently become clear that this is exceedingly unlikely given the possibilities of a rate cut in the US. In fact, market rates now predict 25 basis points in rate cuts through year-end in Canada, and softer-than-expected CPI or retail sales could fuel speculation of imminent rate cuts and push the Loonie lower.
[B]Data for September 18 - September 24
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[B]Data for September 18 - September 24[/B]
[B]Date
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[B]Euro Zone Economic Data
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[B]Date
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[B]Canadian Economic Data
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Sep 18

        German ZEW Survey        (SEP)

        
        Sep        19

        Bank ofCanada CPI Core        (AUG)

           Sep        21

        Euro-zone PMI Manufacturing        (SEP A)

        
        Sep        20

        Wholesale Sales        (JUL)

           Sep        21

        Euro-zone PMI Services (SEP        A)

        
        Sep        21

        Retail Sales        (JUL)