#EURCAD @ 1.43164 has dropped sharply to near 1.4300 due to anxiety ahead of BoC policy. (Pivot Orderbook analysis)

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• EUR/CAD has dropped sharply to near 1.4300 due to anxiety ahead of BoC policy.
• An unchanged interest rate decision with a hawkish commentary is expected from the BoC.
• ECB
• policymakers are still supporting more interest rate hikes despite bleak economic prospects.

The pair currently trades last at 1.43164.

The previous day high was 1.441 while the previous day low was 1.4318. The daily 38.2% Fib levels comes at 1.4353, expected to provide resistance. Similarly, the daily 61.8% fib level is at 1.4375, expected to provide resistance.

The EUR/CAD has delivered a breakdown of the consolidation formed in a narrow range of 1.4320-1.4340 in the London session. The asset has dropped to near the round-level support of 1.4300. More action is anticipated from the pair ahead of the interest rate decision by the Bank of Canada (BoC).

BoC Governor Tiff Macklem has been keeping interest rates steady at 4.5% in their last two monetary policy meetings, reiterating that the current policy is restrictive enough to give a tough fight to Canada’s inflation. Also, Canada’s inflation has sharply slowed to 4.4% in April from post Covid high of 8.1% recorded in June 2022.

Analysts at ING expect the BoC to leave the policy rate at 4.5%, but after stronger-than-expected consumer price inflation and GDP and with the labor data remaining robust, we cannot rule out a surprise interest rate increase. A hawkish hold should be enough to keep the Canadian Dollar supported.

Later this week, Canada’s Employment data (May) will be of utmost importance. As per the preliminary report, the economy added fresh 23.2K jobs in May lower than April’s addition of 41.4K. The Unemployment Rate is seen rising to 5.1% from the former release of 5.0%.

Meanwhile, the Euro has come under pressure after German Factory Orders contracted sharply and Eurozone Retail Sales remained stagnant. However, European Central Bank (ECB) policymakers are still supporting more interest rate hikes amid persistence in core inflation. ECB President Christine Lagarde conveyed in the last monetary policy meeting that more than one interest rate hike is appropriate.

Technical Levels: Supports and Resistances

EURCAD currently trading at 1.4316 at the time of writing. Pair opened at 1.4332 and is trading with a change of -0.11 % .

The pair is trading below its 20 Daily moving average @ 1.4568, below its 50 Daily moving average @ 1.4702 , below its 100 Daily moving average @ 1.4613 and above its 200 Daily moving average @ 1.4197

The previous day high was 1.441 while the previous day low was 1.4318. The daily 38.2% Fib levels comes at 1.4353, expected to provide resistance. Similarly, the daily 61.8% fib level is at 1.4375, expected to provide resistance.

Note the levels of interest below:

• Pivot support is noted at 1.4297, 1.4261, 1.4205
• Pivot resistance is noted at 1.4389, 1.4445, 1.4481

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