Source: PaxForex Premium Analytics Portal, Fundamental Insight
The German Wholesale Price Index for December decreased by 0.6% monthly and by 2.6% annualized. Forex traders can compare this to the German Wholesale Price Index for November, which contracted by 0.2% monthly and 3.6% annualized.
The Italian Trade Balance for November is predicted at €5.200B. Forex traders can compare this to the Italian Trade Balance for October, reported at €4.699B.
The German Full-year GDP Growth for 2023 is predicted to show a contraction of 0.30%. Forex traders can compare this to the German Full Year GDP Growth for 2022, which expanded by 1.9%.
Eurozone Industrial Production for November is predicted to decrease by 0.3% monthly and 5.9% annualized. Forex traders can compare this to Eurozone Industrial Production for October, which dropped by 0.7% monthly and 6.6% annualized.
The Eurozone Trade Balance for November is predicted at €11.20B. Forex traders can compare this to the Eurozone Trade Balance for October, reported at €11.10B.
Canadian Final Manufacturing Sales for November are predicted to increase by 1.0% monthly, and Final Wholesale Sales by 0.8% monthly. Forex traders can compare this to Canadian Manufacturing Sales for October, which dropped by 2.8% monthly, and Final Wholesale Sales, which decreased by 0.5% monthly.
The new trading week will start slowly, giving the Eurogroup meeting more weight. Traders should also monitor rising tensions in the Middle East after the US and the UK attacked Yemen. Upward pressure on commodity prices, shipping rates, and supply bottlenecks add to inflationary pressures. It could derail hopes for interest rate cuts and dampen economic activity. Last week’s US inflation data for December showed an uptick with a red-hot labor market adding wage-based inflation, meaning higher rates for longer could materialize.
The forecast for the EUR/CAD turned cautiously bearish after this currency pair moved into its horizontal resistance area inside of its narrowing Ichimoku Kinko Hyo Cloud. The bearish crossover between the Senkou Span A and the Senkou Span B increased downside momentum. Volatility could increase with bulls and bears wrestling for control, confirmed by the flat Tenkan-sen and Kijun-sen, following a bearish crossover. Traders should also monitor the CCI in extreme overbought territory. A breakdown below 100 could trigger a sell-off, and this technical indicator has plenty of downside potential. Can bears regain control over the EUR/CAD and pressure price action 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 EUR/CAD remain inside the or breakdown below the 1.4655 to 1.4720 zone, PaxForex recommends the following trade set-up:
- Timeframe: D1
- Recommendation: Short Position
- Entry Level: Short Position @ 1.4680
- Take Profit Zone: 1.4325 – 1.4425
- Stop Loss Level: 1.4800
Should price action for the EUR/CAD breakout above 1.4720, PaxForex recommends the following trade set-up:
- Timeframe: D1
- Recommendation: Long Position
- Entry Level: Long Position @ 1.4800
- Take Profit Zone: 1.4875 – 1.4925
- Stop Loss Level: 1.4720
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