Overview
The EURCAD exchange rate is showing signs of a potential correction from its recent highs, with upcoming economic data expected to influence its movement. The pair has recently tested the 1.6000 level, indicating possible weakness ahead.
Technical Analysis
Currently, the EURCAD is poised for a potential decline towards the 1.5800 level, which would test the uptrend support. A further drop could see the exchange rate target the 1.5300 level.
Upcoming Economic Data
On Tuesday, significant data releases are anticipated, including the ZEW economic surveys for Germany and the Eurozone. Recent improvements in economic sentiment suggest that the figures may be strong enough to bolster the euro.
The data is scheduled for release at 5 PM HKT, alongside Eurozone industrial production figures, which are expected to show a growth of 0.9% from a previous decline of -2.4%. A positive report could reinforce trader confidence in the economic recovery.
Canadian Economic Indicators
Later in the evening, Canadian consumer price inflation data will be released at 8:30 PM HKT. The previous reading was 1.9%, up from 1.7%, indicating persistent inflationary pressures.
This data will conclude the week's economic releases for the EURCAD pair, with market focus shifting towards the G20 meeting. The Canadian dollar has recently gained strength due to robust job growth, with 83,000 jobs added, although the unemployment rate remains elevated at 6.9%.
Analysts had anticipated an increase in the unemployment rate to 7.1% from 7% in May, with no new jobs added, making the upcoming inflation data critical ahead of the Bank of Canada's monetary policy decision.
Market Sentiment
European markets opened weaker following U.S. President Donald Trump's announcement of a potential 30% tariff on imports from the region. EU trade ministers convened to discuss the implications of this announcement, with caution surrounding any retaliatory measures.