Eurozone – German Trade Balance
At GMT 7:00 a.m., the Destatis released the trade balance figure of Germany, which measures the difference in value between net imported and exported products in the country over the past month.
Since the German economy makes up a large portion of the entire Eurozone economy, it affects the valuation of the Euro more than any other nation in the economic union. Hence, the currency demand for the Euro is positively correlated with the export demand of Germany as foreigners must convert their home currency into Euro in order to pay for their imports from Germany. Because of this correlation, binary options traders and global market analysts consider the German trade balance to be a leading indicator of the valuation of the Euro.
In February, the German trade balance figure came out at 21.6 billion and the forecast for March was set at a slightly reduced figure, at 20.4 billion. However, the actual German trade balance came out way lower than what the market was expecting, at 19.7 billion.
Canada – Housing Starts
At GMT 12:15 p.m., the Canada Mortgage and Housing Corporation (CMHC) released the housing starts, which measures the annualized number of new residential buildings that started the construction process over the past month.
Binary options traders consider the Canadian housing starts figure to be a leading indicator of the Canadian economy because starts of a building construction tend to have a diversified positive wave of effects in the local economy. For instance, new construction workers are hired that creates jobs and various products and services are acquired that stimulates the economy.
Last month, in February, the Canadian housing starts figure came out at 187,000 and the forecast for this month was set at 176,000. The actual figure, however, came out way lower compared to what the market was expecting, at 156,000.
Trade Recommendation for the EUR/CAD
Since August 2014, the EUR/CAD price has traded within a wide range between 1.3880 and 1.4450. However, after breaking the intermediate upward sloping trend line on February 26, 2015, the pair found additional bearish momentum.
Later, on March 4, the EUR/CAD finally broke below the support level around 1.3880 and went on to clear the support level around 1.3752 as well. The 1.3752 level would be now considered as the 100% Fibonacci retracement level of the previous upward swing. As the German trade balance figure came out way lower than the forecast, it may help accelerate the downward momentum in the market.
If the EUR/CAD price breaks below the 1.3620 level from last week, it may drop further over the next few days towards the161.8% extension level, at 1.3296. Under the circumstances, binary options investors should consider placing a PUT order below the 1.3620 level.[featured feattitle=’Recommended Broker: HighLow.net’ site=’HighLow’ ] HighLow.net is a popular binary options broker regulated by ASIC. [/featured]
About our Forex Analyst: Asif Imtiaz
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