The EUR/CAD exchange rate pulled back for the third consecutive day, reaching a low of 1.5790, down modestly from this month’s high of 1.5878. Focus now shifts to the upcoming European GDP and jobs numbers. It remains 1.55% above its lowest level this year.
European GDP Data Ahead
The EUR/CAD pair has pulled back over the past three days, erasing some of the gains it made in the first few days of November. This retreat happened as investors started booking profits after the recent rally.
A report released last Friday showed that the unemployment rate rose to 6.7% in October from 6.5% in the previous month, which was worse than the 6.5% increase analysts had expected. The economy also lost 4.7k jobs in October, after losing 68.3k in September. Analysts had expected a gain of 14.6k.
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These numbers suggest that the Bank of Canada (BoC) is unlikely to raise interest rates again. In October, the bank hiked rates by 0.25% to 2.5%, its first increase in three years, in response to rising inflation. The most recent data showed that headline consumer inflation rose to 3.1% in September from 3.0% in August, its highest level in two years.
As a result, if the Bank of Canada hikes interest rates again, there is a likelihood that the economy will worsen over time.
The next important catalyst for the EUR/CAD will be the upcoming European macro data, which will come out on Friday. Eurostat will publish the latest GDP numbers, with analysts expecting the figure to come in at 1.3%. The agency will also publish the latest employment numbers.
EUR/CAD Technical Analysis
EURCAD chart | Source: TradingView
The daily chart shows that the EUR/CAD pair has been in a strong upward trend in the past few weeks, moving from 1.5550 to a high of 1.5878. It then formed a shooting star candle on November 10, triggering a brief pullback. This pullback happened after the pair neared the 50% Fibonacci Retracement level.
The pair has remained above the Supertrend indicator. It also remained above the Ichimoku cloud indicator. Therefore, the pair will likely bounce back, potentially to this week’s high of 1.5878. A move above that level will point to more gains, potentially to the resistance level of 1.5913, the 50% Fibonacci Retracement level.
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The post EUR/CAD Forecast: Brace for a Comeback Ahead of Eurozone GDP Data appeared first in UK on InvestingCube .
