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Market Analysis

Home » Technical Analysis » Daily » EURCAD Testing Crucial Resistance Area

EURCAD Testing Crucial Resistance Area

Posted by FXTimes in Daily - May 4th, 2016 11:58 am GMT

euro EURUSD

Key Points

  • Euro surged higher vs the Canadian dollar recently, and currently trading near a major resistance area.
  • There is a major swing area around 1.4620-50 which acted as a support and resistance earlier, and the EURCAD is currently trading near it.
  • The Euro Zone Services PMI released by the Markit Economics posted a decrease from 53.2 to 53.1 in April 2016, whereas the market was not expecting any change.
  • German Services PMI also declined from 54.6 to 54.5 in April 2016.

Technical Analysis

The Euro exchange rate appreciated lately against the Canadian dollar and spiked by more than 300 pips. There was a nice ride noted in EURCAD, taking it above the 100 simple moving average on the 4-hours chart.

EURCAD

Currently, the pair is trading near a major swing area, which acted as a support and resistance earlier and may stall the current upside move.

Only a break above the highlighted resistance area could take the pair further higher in the short term.

Euro Zone Services PMI

Today in the Euro Zone, the PMI service, which is an indicator of the economic situation in the Euro Zone services sector was released by the Markit Economics. The forecast was slated for no change in the PMI from 53.2 in April 2016. However, there was a minor decline posted from 53.2 to 53.1.

The report pointed out that “Growth of incoming new business accelerated to a three-month high in April, but remained below the average seen over last year. Higher order inflows led to a slight accumulation in backlogs of work and encouraged firms to take on more staff“.

The euro may be facing a major resistance area vs the Canadian dollar, but the chances of it gaining further are more in the short term.

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