Euro Cross Pick 05.19.2011
Following up with long EUR/CAD trade, I have held the position after buying it at 1.3811, but will tighten the stop (1.3711) to cost after the close as we have two major pieces of event risk coming out of Canada tomorrow. The headline reading for Canadian inflation is forecasted to increase at an annualized pace of 3.4% in April, which would be the fastest pace of growth since September 2008, while retail sales is expected to increase another 0.9% in March after climbing 0.4% in the previous month. As the recovery in Canada gathers pace, the data is likely to feed speculation for higher borrowing costs, resulting in a bearish EUR/CAD reaction. If my position gets closed out, I will certainly look for a better price to go long as the pair holds support around the 200-Day SMA at 1.3636.
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