11 Oct 2013
EUR/CAD collapses as better Canadian labor data caught traders off guard
FXstreet.com (Athens) – The EUR/CAD is heading immensely south after the solid labor data announced in Canada, showing a lower unemployment rate (6.9%) and more employed people than forecasted.
EUR/CAD heads south amidst great volatility on solid Canadian jobs data, long weekend ahead
The EUR/CAD was hovering above 1.4100 area – roughly at 1.4103 – before the release of the labor Canadian data. Taken for granted that we are ahead of a long three-day weekend as there is the ‘thanks giving day’ in Canada on Monday – which is seen as supportive for the “loonie” as positions reductions – it was obvious that a solid data release would buoy the “loonie” upwards across the board, thus dragging the cross downwards. As a matter of fact and to be more précised, the cross lost solid ground after the release approximately around 25 pips. Last but not least, traders should not forget that the cross was caught amidst a constant trend shift since the past month, with breaks to new levels of CAD weakness occurring on both risk-on as well as on risk-off days, therefore the earlier reaction of the “loonie” might be seen as a change on the general trend behavior. In addition to the above, the BoC quarterly business outlook and loan officer surveys will be released. Both releases will garner to a major extent a considerable market attention, due to the fact that the new governor of BoC will provide hints on inflationary expectations, as well as on investment intentions.
Technical Outlook on EUR/CAD
Greg Anderson, Head of FX Strategy on behalf of BMO Bank suggests that the “EUR/CAD is still pressing higher but needs to break through the key 1.4100/1.4125 area to gain momentum. If today’s date is in-line with expectations, we should have a quiet end to the week as the market gears up for the long weekend, with both the US and Canada closed on Monday.”
EUR/CAD heads south amidst great volatility on solid Canadian jobs data, long weekend ahead
The EUR/CAD was hovering above 1.4100 area – roughly at 1.4103 – before the release of the labor Canadian data. Taken for granted that we are ahead of a long three-day weekend as there is the ‘thanks giving day’ in Canada on Monday – which is seen as supportive for the “loonie” as positions reductions – it was obvious that a solid data release would buoy the “loonie” upwards across the board, thus dragging the cross downwards. As a matter of fact and to be more précised, the cross lost solid ground after the release approximately around 25 pips. Last but not least, traders should not forget that the cross was caught amidst a constant trend shift since the past month, with breaks to new levels of CAD weakness occurring on both risk-on as well as on risk-off days, therefore the earlier reaction of the “loonie” might be seen as a change on the general trend behavior. In addition to the above, the BoC quarterly business outlook and loan officer surveys will be released. Both releases will garner to a major extent a considerable market attention, due to the fact that the new governor of BoC will provide hints on inflationary expectations, as well as on investment intentions.
Technical Outlook on EUR/CAD
Greg Anderson, Head of FX Strategy on behalf of BMO Bank suggests that the “EUR/CAD is still pressing higher but needs to break through the key 1.4100/1.4125 area to gain momentum. If today’s date is in-line with expectations, we should have a quiet end to the week as the market gears up for the long weekend, with both the US and Canada closed on Monday.”