Technical Bias: Bearish
- Euro recovered against the Canadian Dollar recently, but found resistance around 1.4400 resistance area.
- German Factory orders released by the Deutsche Bundesbank posted an increase of 2% in June 2015, more than the forecast of 0.2%.
- In terms of the yearly change, the German Factory orders rose 7.2%.
The EURCAD pair tested an important resistance area around 1.4400 twice, but failed to clear it. It resulted in a downside reaction, which pushed the pair below the 100 hourly simple moving average. There are a couple of bearish trend lines formed on the hourly chart, which are acting as a barrier for an upside move. As long as the pair is below the trend line confluence area more declines are likely.
The failure to move higher was also due to the 76.4% Fib retracement level of the last drop from 1.4431 to 1.4282. Overall, there can be a downside move if sellers remain in control.
On the downside, the next level of support can be seen around the 200 SMA.
German Factory Orders
Today in the Euro Zone, the German Factory orders, which is an indicator that includes shipments, inventories, and new and unfilled orders was released by the Deutsche Bundesbank. The market was expecting an increase of 0.2% in orders in June 2015, compared with the preceding month. However, the outcome was way above the forecast, as the German Factory orders rose by 2%.
In terms of the yearly change, the German Factory orders increased 7.2% in June 2015, compared with the same month a year ago. It was also higher, when compared with the last gain of 4.5% (revised).
Overall, the data was on the positive side, and helped the Euro to gain traction. However, there was no reaction in EURCAD, as the pair was seen under the bearish pressure all the time.
Selling rallies closer to the highlighted trend line resistance area is a good option.