Source: PaxForex Premium Analytics Portal, Fundamental Insight
German Industrial Production for November is predicted to increase by 0.1% monthly. Forex traders can compare this to German Industrial Production for October, which decreased by 0.1% monthly.
The French Trade Balance for November is predicted at -€11.30B. Forex traders can compare this to the French Trade Balance for October, reported at -€12.20B.
The Italian Unemployment Rate for November is predicted at 7.8%. Forex traders can compare this to the Italian Unemployment Rate for October, reported at 7.8%.
The Eurozone Unemployment Rate for November is predicted at 6.5%. Forex traders can compare this to the Eurozone Unemployment Rate for October, reported at 6.5%.
Eurozone Sentix Investor Confidence for January is predicted at -18.0. Forex traders can compare this to Eurozone Sentix Investor Confidence for December, reported at -21.0.
Canadian Building Permits for November are predicted to increase by 3.9% monthly. Forex traders can compare this to Canadian Building Permits for October, which decreased by 1.4% monthly.
The Euro can continue its recovery from multi-year lows reached in 2022, as economic data held up despite interest rate increases by the European Central Bank. A global recession will apply downside pressure on all currencies, where the Euro should trump the Canadian Dollar, which relies heavily on commodity prices, especially oil and natural gas. Central banks in both countries could tighten monetary policy further, but the degree of interest rate increases could differ. Canada may approach the end of its cycle, while the Eurozone has more room to hike, creating bullish factors for the EUR/CAD.
Traders should expect short-term volatility and sideways trending price action before bullish factors can continue the long-term uptrend, as economic data holds up reasonably well across the Eurozone. Inflation remains the wildcard, as it has receded, but could stay stubbornly elevated throughout 2023, which would harm the Canadian economy more than the Eurozone, which is more diversified.
The forecast for the EUR/CAD remains bullish after this currency pair corrected into Senkou Span A of the sideways Ichimoku Kinko Hyo Cloud. Volatility could increase as the rising Kijun-sen approaches the descending Tenkan-sen, but a sustained bullish crossover can extend the current long-term advance that has exceeded 1,000+ pips. Traders should monitor the CCI after it has recorded a lower low in extreme oversold territory before reversing. A breakout above -100, followed by a push above zero, could start the next leg higher in this bull run. Can bulls overpower bears and pressure the EUR/CAD into its horizontal resistance 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 breakout above the 1.4235 to 1.4340 zone, PaxForex recommends the following trade set-up:
- Timeframe: D1
- Recommendation: Long Position
- Entry Level: Long Position @ 1.4300
- Take Profit Zone: 1.4520 – 1.4590
- Stop Loss Level: 1.4165
Should price action for the EUR/CAD breakdown below 1.4235, PaxForex recommends the following trade set-up:
- Timeframe: D1
- Recommendation: Short Position
- Entry Level: Short Position @ 1.4165
- Take Profit Zone: 1.4000 – 1.4055
- Stop Loss Level: 1.4235
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