With crude oil enjoying additional volatility these days, will the correlated Loonie also be in for big moves?
Here’s a pullback setup I’m watching.
Before moving on, ICYMI, today’s Asia-London session watchlist checked out AUD/NZD’s support test ahead of New Zealand’s inflation expectations report. Be sure to check out if it’s still a valid play!
And now for the headlines that rocked the markets in the last trading sessions:
Fresh Market Headlines & Economic Data:
Chinese reserve bureau reportedly working on oil reserves release
New Zealand inflation expectations up from 2.27% to 2.96% in Q3
Evergrande sold stake in streaming platform HengTen
IEA and OPEC warned of potential global glut on oil reserves release
Upcoming Potential Catalysts on the Economic Calendar:
U.S. Philly Fed manufacturing index at 1:30 pm GMT
U.S. initial jobless claims at 1:30 pm GMT
FOMC member Williams’ speech at 2:30 pm GMT
FOMC member Evans’ speech at 7:00 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
The oil-related Loonie sold off recently on downbeat Canadian inflation reports and the prospect of oil reserves being released to the global market.
But will resistance levels still draw EUR/CAD sellers out?
The pair is already testing the 50% Fibonacci retracement level, which is right smack in line with the 100 SMA dynamic inflection point and a former support zone.
A larger correction could still reach the 61.8% Fib that lines up with the 200 SMA dynamic inflection point and the 1.4350 minor psychological mark.
If these Fibs are enough to keep gains in check, EUR/CAD could resume the slide to the swing low at 1.4175 or lower.
After all, the 100 SMA is below the 200 SMA to confirm that the path of least resistance is to the downside. Also, Stochastic already reached the overbought zone to signal exhaustion among buyers and a likely return in selling pressure.
There are no major reports out of Canada today, so Loonie traders would likely keep their eyes and ears peeled for crude oil updates.
