EUR and Lonie bearish (EURCAD)We start the day with slightly positive stocks in Europe, after yesterday the US indices closed with the S%P500 and Nasdaq closing negative and the Dow Jones closing slightly positive. The Canadian index closed higher with the S&P/TSC Composite up +1.36% after positive earnings releases in energy, socimis and utilities boosted the Toronto index. Highlights: Africa Oil Corp (+10.34%), Birchcliff Energ Ltd (+6.47%), First Quantum Minerals Ltd (+6.13%). Falling: Osisko Gold Ro (-5.39%), Energy Fuels Inc (-4.94%), Celestia Inc (-4.92%). The difference between bullish versus bearish stocks meant that the Toronto Stock Exchange ended barely unchanged, with volatility in its VIX index dropping to 9.05.
Spain publishes quarterly and annual GDP growth data, and we have auctions of British 10-year bonds, and short-term bonds from Italy and Germany. In the afternoon, important inflation and production index data are released in Canada, closing the afternoon with US data from the Chicago Fed on activity, and Johnson's Red Book on sales. U.S. home price data will also be released, as well as the Richmond Fed's index of manufacturing, services, and shipments. The Dallas Fed will release services data and closing statements from Governors Cook and Bowman of the Fed's board of directors will possibly provide a review on rates and on the policies being pursued by the Fed.
If we focus on the EURCAD, the cross has left the highs of June 6 with attempts to return to the upside. Yesterday a bearish reversal signal was given. Following the directionality of the whole month, we can see that at least the cross should return to the resistance zone between 1.45774 and 1.45417, touching a possible floor at the low of 1.44434. But it is expected that the price will correct to the upside. At the moment the RSI is oversold by 44.5% so this added to the price bell with the control point at 1.47310 would be possible a return to that price zone most traded since early March.
Ion Jauregui - ActivTrades Analyst
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