Source: PaxForex Premium Analytics Portal, Fundamental Insight
The Australian Westpac Leading Index for June decreased 0.2% monthly. Forex traders can compare this to the Australian Westpac Leading Index for May, which contracted 0.1%.
The Chinese 1-Year Loan Prime Rate for July came in at 3.70%, and the Chinese 5-Year Loan Prime Rate at 4.45%. Forex traders can compare this to the previous Chinese 1-Year Loan Prime Rate for June, reported at 3.70% and to the Chinese 5-Year Loan Prime Rate reported at 4.45%.
The Canadian CPI for June is predicted to increase 0.9% monthly and 8.4% annualized. Forex traders can compare this to the Canadian CPI for May, which rose 1.4% monthly and 7.7% annualized. The Canadian Core CPI for June is predicted to rise 5.9% annualized. Forex traders can compare this to the Canadian Core CPI for May, which surged 6.1% annualized. The Core CPI-Median for June is predicted to expand by 5.1% annualized and the Core CPI-Trimmed by 5.9% annualized. Forex traders can compare this to the Core CPI-Median for May, which rose 4.9% annualized, and to the Core CPI-Trimmed by 5.4% annualized.
Inflation remains the primary focus while the second quarter earnings season kicked off mixed but better than anticipated, but full-year outlooks come in worse than feared. The US Dollar is eating into profits. UK inflation this morning clocked in above forecasts for June, confirming the global trend of deeply embedded inflationary pressures. Thanks to central banks, inflation appears to roost for the long-term. Economic data comes in mixed, China kept its lending rates unchanged, and the global food crisis adds downside pressures to consumer confidence. Cryptocurrencies rebounded from depressed levels. Some near the 50% retracement, suggesting the bear market rally nears the end with lower lows on the horizon to shake-off extreme valuations. Bankruptcies have shaken confidence and revealed Ponzi scheme operating models at once trusted cryptocurrency companies.
The forecast for the AUD/CAD remains bearish after this currency pair accelerated into its horizontal resistance area, enforced by its descending Ichimoku Kinko Hyo Cloud, which hints at more volatility ahead. Price action is trapped between its flat Tenkan-sen and Kijun-sen, from where a breakdown is likely. Traders should monitor the CCI after it surged into extreme overbought territory and wait for a breakdown below 100, which could signal an accelerated sell-off. Can bears regain control over price action and pressure the AUD/CAD into its horizontal support area? Subscribe to the PaxForex Daily Fundamental Analysis and earn over 5,000 pips per month.
Should price action for the AUD/CAD remain inside the or breakdown below the 0.8830 to 0.8930 zone, PaxForex recommends the following trade set-up:
- Timeframe: D1
- Recommendation: Short Position
- Entry Level: Short Position @ 0.8900
- Take Profit Zone: 0.8365 – 0.8470
- Stop Loss Level: 0.9010
Should price action for the AUD/CAD breakout above 0.8930, PaxForex recommends the following trade set-up:
- Timeframe: D1
- Recommendation: Long Position
- Entry Level: Long Position @ 0.9010
- Take Profit Zone: 0.9215 – 0.9230
- Stop Loss Level: 0.8930
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