EUR/CAD – The Play For Payrolls

EUR/CAD – The Play For Payrolls

Chart Of The Day

EUR/CAD -- The Play For Payrolls

Fundamentals

The euro staged a massive reversal post ECB today as the market shrugged off Mr. Draghi’s rate cutting efforts after he basically confirmed that no more rate cuts were coming. Long term the negative rate environment could still weigh the euro down but for now the market is in a short covering mode that could continue for a few more days. That rally in the euro could be extend tomorrow if the US NFPs miss their mark. The ADP survey which is far from a perfect predictor suggested that the number could be light. Meanwhile up north the market will get a glimpse at the Canadian data and here the labor conditions are likely to be even worse. Canadian retail sales, trade numbers and other micro economic data points have all disappointed this month indicating that the aggregate demand is weak. If Canadian labor report proves to be a dud EUR/CAD could climb through the 1.5000 level as the flow to euro continues.

Technicals

Technically EUR/CAD has seen a sharp bounce off the 1.4700 level creating a V bottom that suggests further upside ahead. If momentum could propel it through the 1.5000 level the pair could target 1.5100. Meanwhile a move down could create a test of a double bottom at 1.4700