EURCAD has been trending higher on its 4-hour time frame and moving inside an ascending channel. Price has moved past the mid-channel area of interest and is making its way to the resistance around the 1.4900 major psychological level.
The 100 SMA is below the longer-term 200 SMA so the path of least resistance is to the downside, which means that the resistance could keep gains in check. If so, EURCAD could eventually make its way back towards support at 1.4500 or at least until the middle of the channel at 1.4700.
Stochastic is on the move up, which means that buyers still have enough energy to push higher. Once the oscillator reaches the overbought zone and turns lower, sellers could return and force the pair to give back its recent gains.
Economic data from the euro zone came in line with expectations yesterday, signaling that the ECB might not need to ramp up stimulus just yet. Headline CPI flash estimates came in at 0.5% as expected while the core CPI flash reading stood at 0.8%. The region’s GDP estimate came in at 0.3% as expected.
Canada’s inflation reports came in mixed, with the RMPI posting a surprise 0.1% decline versus the estimated 0.5% gain and the IPPI coming in line with the projected 0.4% uptick. However, crude oil price action turned out to be a bigger driver of Loonie movement, as record high OPEC output pushed the commodity down.
Doubts that the OPEC can implement an output deal by the November 30 meeting have been weighing on crude oil and the oil-related Canadian dollar, although inventory data has shown some reductions in stockpiles. Canada’s monthly GDP is due today and a 0.2% growth figure is eyed, slower than the earlier 0.5% expansion.