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EURCAD Under Lot of Bearish Pressure

Key Points

  • Euro faced a lot of heat today, as it was down against most major currencies, including the Canadian dollar.
  • Canadian Dollar gained a lot of ground lately, and this is the reason why EURCAD was down.
  • German Manufacturing Purchasing Managers Index (PMI) released by the Markit economics posted a decline from 52.3 to 50.2 in Feb 2016.
  • German Services PMI also declined and posted a reading of 53.8.

Technical Analysis

The Euro was down and out against the Canadian Dollar. There was a support trend line on the 4-hours chart of the EURCAD pair, which was cleared by sellers to open the doors for more losses in the near term. There is now a bearish trend line formed, which is acting as a hurdle for buyers.

EURCAD

The EURCAD is currently trading near the 1.236 extension of the last wave from the 1.5140 low to 1.5391 high. So, there is a possibility of a minor pullback, but that may find sellers moving ahead.

On the downside, the next monster support area can be around 1.5000.

German Manufacturing Purchasing Managers Index

Today there were a couple of important releases in the Euro Zone, including the German Manufacturing Purchasing Managers Index (PMI), which captures business conditions in the manufacturing sector was published by the Markit economics. The forecast was lined up for a decrease from 52.3 to 52.0 in Feb 2016. However, the outcome was disappointing, as the German Manufacturing Purchasing Managers Index declined to 50.2 (preliminary).

The report stated that “New orders at companies in Germany continued to increase at a solid pace in February, with the rate of expansion unchanged from the previous month“.

Overall, the Euro was under a lot of pressure after the releases. There are chances of a minor correction, but it may find sellers in that scenario.

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