Binary Options Analysis – Trade of the Week: EUR/CAD 6th April 2015

Eurozone – Spanish Unemployment Change

Although it is a Bank holiday in some of the major European economies for the observance of Easter Monday, the Spanish Government Offices are open. At GMT 7:00 a.m., the Spanish Employment Ministry released the national unemployment change figure, which measures the changes in the number of unemployed people over the past month.

The number of unemployed people indicates the overall economic health of Spain, because employment is closely related to consumer spending. It is because when people have jobs, they feel secure about their financial future and tend to spend more. Therefore, binary options traders consider this data to be an important indicator of the Spanish economy. Also, as an important member of the European Union, Spain’s economic situation has a substantial effect on the valuation of the Euro.

In March, the Spanish unemployment change figure came out at -13,500 and the forecast for this month was set at -18,300. However, the actual figure came out way better than what the market was expecting, at -60,200.

Canada – Ivey Purchasing Managers’ Index (PMI)

In the afternoon, at GMT 2:00 p.m., the Richard Ivey School of Business will release the Ivey PMI, which measures the level of a diffusion index by surveying around 175 purchasing managers in Canada.

Since businesses are the first to react to the changing market situation, their purchasing managers tend to have the most updated insight about their respective companies’ view regarding the economy. Hence, binary options traders consider the Ivey PMI to be a leading indicator of the Canadian economy.

Last month, on March 5, the Ivey PMI reading came out at 49.7 and the forecast for April is currently set at a slightly improved reading of 51.1. It is important to note that a reading above 50 indicates expansion, where a reading below 50 usually means the economy is contracting.

Trade Recommendation for the EUR/CAD

Chart EURCAD, D1, 2015.04.06 11:44 UTC
Since the last week of February, the EUR/CAD has remained in a strong down trend, which ended on March 17 when the pair broke above the downward sloping trend line. The subsequent bullish momentum pushed the EUR/CAD price above the resistance level around 1.3620. However, it failed to penetrate above the 1.3750 level for the last several weeks.

Currently, the EUR/CAD is trading within a narrow range between 1.3550 and 1.3750.

Given that the Spanish unemployment change figure came out much better than expected, it has encouraged the EUR/CAD bulls to push up the price around 50 points since this morning. If the Ivey PMI reading of the Canadian economy comes at 51.1, the EUR/CAD price will certainly find additional bullish momentum and we may see it testing the 1.3750 level once again.

If the EUR/CAD price closes above the 1.3750, it should remain above this level for the rest of the week, as the resistance would turn into a strong support. In that situation, it would be recommended that binary options traders consider placing a CALL order with the EUR/CAD once the price closes above the 1.3750 level.

Recommended Broker: HighLow.net

About our Forex Analyst:  Asif Imtiaz

Asif worked as a prop trader for almost a decade, and later he managed trading operations for one of the largest foreign exchange strategy developers in Europe. Currently, he works as a trading consultant to several brokers and writes on various tech and financial topics. You can reach him at contact@asifimtiaz.com

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Asif Imtiaz

Asif worked as a prop trader for almost a decade, and later he managed trading operations for one of the largest foreign exchange strategy developers in Europe. Currently, he works as a trading consultant to several brokers and writes on various tech and financial topics. You can reach him at contact@asifimtiaz.com

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