EUR/CAD Appears Range Bound, Offers Two Trading Possibilities Based on Inside Bar Breakout

Eurozone – German Ifo Business Climate Index

Yesterday, at GMT 9:00 a.m., the Ifo Institute for Economic Research published this month’s German Business Climate index. The Ifo Business Climate figure measures the level of a composite index, which is created by surveying around 7,000 businesses in Germany by asking them to rate the comparative business conditions of now and in six months.

Since the survey has a large sample size compared to similar studies, binary options investors consider the Ifo Business Climate to be a strong leading indicator of the overall economic optimism in the country.

Last month, the German Ifo Business Climate index came out at 108.5, and this month, the forecast was set slightly lower, at 108.1. Nevertheless, the actual Ifo Business Climate index came out better than the market’s expectation, at 108.2.

Canada – Raw Materials Price Index

Later in the week, on Thursday, at GMT 12:30 p.m., the Statistics Canada will release the month-over-month Raw Materials Price Index (RMPI), which measures the changes in the price of raw materials bought by manufacturers in the country over the past month.

Binary options traders consider the RMPI to be an important leading indicator of consumer inflation in Canada, because if manufacturers pay more to buy raw materials, then ultimately the retail customers end up paying for the higher cost of production.

Over the past several months, the Canadian RMPI has been gradually increasing. But, in September, it fell by 6.6%, after falling by 5.9% in August. If the current trend continues, it would add additional bearishness to the Canadian Dollar.

Trade Recommendation for the EUR/CAD

EURCADDaily

After the EUR/CAD price broke below the uptrend line in August, it mostly traded in a range bound price action for the last few weeks. However, last week, the EUR/CAD formed a large bearish bar, which pushed the price towards the important pivot zone around the 1.4450 level.

As the German Ifo business climate index remained pretty much neutral over the last two months, there are hardly any fundamental factors in the market. But, a declining Canadian RMTI indicates that there is a possibility that the support around 1.4450 level would actually hold the price for now. This situation offers a possibility of a bullish move as well.

Under the circumstances, it is recommended that traders consider placing a PUT order for the EUR/CAD with their binary options brokers, once the price penetrates and closes below the 1.4440 level. On the other hand, if the EUR/CAD price penetrates and closes above the high of Friday’s inside bar, which is at 1.4583, they should consider placing a CALL order instead.

Recommended Broker: HighLow.net

About our Forex and Binary Options 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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