Technical Bias: Bullish
- Euro managed to gain bids against the Canadian Dollar and might continue to trade higher moving ahead
- German Producer Price Index released by the Statistisches Bundesamt Deutschland registered no change in July 2015, whereas the market was expecting it to decrease by 0.1%.
- In terms of the yearly change, the German PPI decreased by 1.3%, less than the market expected.
- EURCAD cleared a major bearish trend line recently, opening the doors for more upsides.
The Euro climbed higher recently against the Canadian Dollar, and managed to clear a major bearish trend line on the hourly chart. There were a few retest attempts for the highlighted trend line and buyers successfully managed to hold the downside. The pair is currently trading near 1.4618 where it is facing resistance.
However, the chances of it breaking higher is more, as the pair is above the 100 and 200 hourly simple moving averages. The hourly RSI is around is the overbought levels, which is a signal of a short-term correction.
On the upside, a break above the last high of 1.4618 might call for more gains moving ahead.
Earlier during the London session, the Producer Price Index, which measures the average changes in prices in the German primary markets was released by the Statistisches Bundesamt Deutschland. The forecast was lined up for a decrease of 0.1% in July 2015, compared to the preceding month. However, the outcome was better than the forecast, as the German PPI posted no change in July.
In terms of the yearly change, the German PPI fell 1.3% in July 2015, compared to the same month a year ago, which was lower compared to what the market expected.
Overall, the outcome was better, and helped the Euro to gain bids. The EURCAD pair might get some help and could trade above the previous high of 1.4618.
We can attempt a buy trade if the EURCAD corrects lower in three waves towards the broken trend line support area.