Chart of the day - EURCAD (29.11.2022)

EURCAD leaped higher yesterday and tested 38.2% retracement of the post-pandemic downward move in the 1.4065 area. Bulls failed to break above and the pair started to pull back. Majority of yesterday's daily gain was erased and the pair is trading slightly lower today. However, it is trading off today's daily lows. The pair may remain active with peak volatility expected in the early afternoon. This is because the German CPI report for November and Canadian GDP report for Q3 2022 will be released today at 1:00 pm GMT and 1:30 pm GMT, respectively. 

German inflation data is expected to show a headline price growth remaining unchanged at 10.4% YoY. However, all five German state-level reading that were already released - North Rhine Westphalia, Hesse, Baden Wuerttemberg, Bavaria and Brandenburg - showed deceleration in headline price growth therefore there is a scope for a downside surprise in the German reading at 1:00 pm GMT. The Canadian report is expected to show an annualized pace of economic growth at 1.5% for Q3 2022, down from 3.3% reported for Q2 2022.

While EURCAD failed to break above 38.2% retracement and pulled back later on, technical outlook for the pair remains bullish - the pair still trades significantly above the lower limit of the Overbalance structure (1.3660) and above the recently broken swing area at 1.3860. 

Source: xStation5