October 29, 2021

Daily U.S. Session Watchlist: EUR/CAD

 Both the Eurozone and Canada are printing GDP data today.

How will the releases affect EUR/CAD’s tight short-term range?

Before we talk setups, check out the headlines that rocked the markets in the last trading sessions:

Fresh Market Headlines & Economic Data:

ECB’s Lagarde sees higher inflation but pushes back on rate-hike bets

Supply chain issues, rising inflation, and Covid restrictions drag US growth from 6.7% to 2.0% in Q3

US jobless claims make third straight drop to pandemic low of 281K

US pending home sales fell unexpectedly in September, likely due to higher mortgage rates

Japan’s factories extend output declines in Sept as supply disruptions weigh

Japan’s jobless rate unchanged at 2.8% in Sept

Australia PPI expands 1.1% on quarter in Q3

Australia retail sales climb 1.3% in September as economy reopens

ANZ: NZ consumer confidence falls as Covid-19 restrictions continue

Evergrande makes coupon payment before Friday deadline, narrowly avoids default for the second time in a week

AUD hits 4-month peak as markets howl for rate hikes

Upcoming Potential Catalysts on the Forex Economic Calendar:

Germany’s preliminary GDP at 8:00 am GMT

Italy’s preliminary GDP at 8:00 am GMT

U.K.’s mortgage approvals at 8:30 am GMT

U.K.’s net individual lending at 8:30 am GMT

Eurozone’s CPI at 9:00 am GMT

Eurozone’s flash GDP at 9:00 am GMT

Canada’s GDP at 12:30 pm GMT

U.S. core PCE price index at 12:30 pm GMT

U.S. Chicago PMI at 1:45 pm GMT

U.S. UoM consumer sentiment at 2:00 pm GMT

If you’re not familiar with the forex market’s main trading sessions, check out our Forex Market Hours tool.

What to Watch: EUR/CAD

Forex playas are in for a busy day as a couple of Eurozone members and the bloc itself are printing GDP reports in a few hours.

Then, a few hours later, we’ll see the Fed’s preferred inflation measure and Canada’s monthly GDP reports.

The euro is at a bit of a disadvantage especially after ECB President Lagarde (strongly) hinted that while they see higher inflation for longer, a rate hike is just not on the table in the foreseeable future.

Meanwhile, Canada’s GDP is expected to show a bit of recovery after shrinking by 0.3% in Q2 2021.

It also doesn’t hurt that central banks of commodity-producing countries like the Bank of Canada (BOC), Reserve Bank of Australia (RBA), and Reserve Bank of New Zealand (RBNZ) are getting tons of fans for their hawish plans.

If today’s economic releases highlight the divergence between the ECB and BOC’s policy plans, then EUR/CAD could find resistance at its current levels and dip towards the bottom of its 150ish-pips range on the 1-hour time frame.

If data from the Eurozone surprises to the upside, though, or if Canada’s GDP data misses market expectations, then EUR/CAD could end its consolidation by retracing some of its September losses.