The euro continues to trade lower against the Sterling as the United Kingdom continue to shows an expanding economy, albeit slow. The data out of the United Kingdom was positive. The second estimate of GDP matched the prelim print of .8 percent, and Britain continues to lead the G7 in growth. Mortgage approvals reached multiyear highs as Bang of England (BoE) Governor Mark Carney ends the credit-lending program to stop any potential housing bubble.
The eurozone’s data was less than stellar. Consumer prices did increase, but core fundamentals remain fragile. Unemployment ticked down from all-time highs to 12.1 percent, but youth unemployment increased to 24.4 percent. Youth employment increased by 15K individuals under 25 years of age.
Support was broken – confirmed with a close below – at .8323. Minor price support at .8300 is currently holding the pair up. However, as the United Kingdom continues to overshadow the eurozone, EURGBP will trade accordingly. The downward forecasting trend line (white dotted) shows the pair’s potential path. Price action support confirms the possibility at .8220.
The Canadian dollar is trading lower against the euro, as it has most of its peers. EURCAD has traded back up to key weekly resistance of 1.4454. The pair reached this level on October 21 and quickly bounced off the following week. After trading down then bouncing off of the 20 EMA, EURCAD has reached key resistance again. As sentiment continues to remain bearish on the Canadian dollar, the pair is likely to trade higher to targets of 1.4583 and a secondary target of 1.4742.
However, the pair can pullback near term at price action support of 1.4255. There is secondary support at 1.3985. This pair will see action as the European Central Bank (ECB) will decide on their benchmark rate Thursday with a press conference following. Analysts expect the ECB to forego any rate deductions, but another surprise maybe in store.