Source: PaxForex Premium Analytics Portal, Fundamental Insight

Italian Industrial Production for April is predicted to increase by 0.1% monthly and drop by 4.1% annualized. Forex traders can compare this to Italian Industrial Production for March, which contracted 0.6% monthly and 3.2% annualized.

Spanish Consumer Confidence for May is predicted at 69.6. Forex traders can compare this to Spanish Consumer Confidence for April, reported at 73.0.

The Canadian Employment Report for May is predicted to show the addition of 23.2K jobs and an Unemployment Rate of 5.1%. Forex traders can compare this to the Canadian Employment Report for April, which showed the addition of 41.4K jobs, and an Unemployment Rate of 5.0%. The Participation Rate for May is predicted at 65.6%. Forex traders can compare this to the Participation Rate for April, reported at 65.6%.

The Canadian Capacity Utilization Rate for the first quarter is predicted at 82.2%. Forex traders can compare this to the Canadian Capacity Utilization Rate for the fourth quarter, reported at 81.7%.

The Eurozone economy entered a technical recession in the first quarter following downward revisions to fourth quarter GDP figures. Many economists and market participants expected it, and the impact on the Euro was less severe than it could have been. The global economy continues to cool, and Canada could enter a recession, which should boost the EUR/CAD moving forward. Core inflation remains sticky, and the European Central Bank is likely to increase interest rates further, flaming stagflationary forces, which are likely to manifest themselves across all G10 economies. The labor market performs reasonably well, and traders should closely monitor wage-based indicators for signs of inflationary pressures.

The forecast for the EUR/CAD turned cautiously bullish after this currency pair 700+ pips into its horizontal support area before stabilizing. Volatility could rise as the Tenkan-sen flatlined below the descending Kijun-sen. The Ichimoku Kinko Hyo Cloud shows signs of a sideways trend following a bearish crossover that resulted in a narrow cloud. Traders should also monitor the CCI after completing a breakout from extreme oversold territory. This technical indicator has plenty of upside potential, and a push above the zero barrier should accelerate the partial price action reversal. Can bulls overpower bears ad regain complete control over the EUR/CAD to push price action into its horizontal resistance area, which envelopes the Senkou Span A of the Ichimoku Kinko Hyo Cloud? 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 1.4340 to 1.4425 zone, PaxForex recommends the following trade set-up:

• Timeframe: D1           
• Recommendation: Long Position
• Entry Level: Long Position @ 1.4385
• Take Profit Zone: 1.4650 – 1.4750
• Stop Loss Level: 1.4285

Should price action for the EUR/CAD breakdown below 1.4340, PaxForex recommends the following trade set-up:

• Timeframe: D1           
• Recommendation: Short Position
• Entry Level: Short Position @ 1.4285
• Take Profit Zone: 1.4025 – 1.4165
• Stop Loss Level: 1.4340

Open your PaxForex Trading Account now and add this currency pair to your forex portfolio.