The global economic slowdown extends as German industrial production slumped in April. This has caused the German trade surplus to sink as exports plunged and imports decreased. Today’s fundamental analysis will take a look at how the Euro may be impacted throughout today’s trading session as forex traders await the key US NFP report for May. Canada is also scheduled to release its employment report. Will the EURCAD extend its corrective phase throughout today’s trading session?
Here are the key factors to keep in mind today for Euro trades:
- German Industrial Production: German Industrial Production for April decreased by 1.9% monthly and by 1.8% annualized. Economists predicted a decrease of 0.5% monthly and of 0.4% annualized. Forex traders can compare this to German Industrial Production for March which increased by 0.5% monthly and which decreased by 0.9% annualized.
- German Trade Balance: The German Trade Balance for April was reported at a €17.0B. Economists predicted a figure of €19.5B. Forex traders can compare this to German Trade Balance for March which was reported at €22.6B. Exports for April decreased by 3.7% monthly and Imports decreased by 1.3% monthly. Economists predicted a decrease of 0.9% monthly and of 0.2% monthly. Forex traders can compare this to Exports for March which increased by 1.6% monthly and to Imports which increased by 0.7% monthly.
Forex trading strategies which focus on the Canadian Dollar will await the release of the May employment report as it is expected to move the Canadian currency. Following last month’s blockbuster employment report, how will today’s data come in? Will the trend continue and support a higher Canadian Dollar or will forex traders be faced with downward revisions?
Here are the key factors to keep in mind today for Canadian trades:
- Canadian Employment Report: The Canadian Employment Report for May is predicted to show the addition of 8.0K jobs and an Unemployment Rate of 5.7%. Forex traders can compare this to the Canadian Employment Report for April which showed the addition of 106.5K jobs and an Unemployment Rate of 5.7%. Hourly Earnings for Permanent Employees for May are predicted to increase by 2.4% annualized. Forex traders can compare this to Hourly Earnings for Permanent Employees for April which increased by 2.6% annualized. 9.0K Full-Time Positions and 0.5K Part-Time Positions are expected to have been created in May. Forex traders can compare this to the creation of 73.0K Full-Time Positions and to the creation of 33.6K Part-Time Positions which were reported in April. The Labor Force Participation Rate for May is expected at 65.8%. Forex traders can compare this to the Labor Force Participation Rate for April which was reported at 65.9%.
- Canadian Capacity Utilization Rate: The Canadian Capacity Utilization Rate for the first-quarter is predicted at 81.1%. Forex traders can compare this to the Canadian Capacity Utilization Rate for the fourth-quarter which was reported at 81.7%.
Should price action for the EURCAD remain inside the or breakdown below the 1.5020 to 1.5070 zone the following trade set-up is recommended:
- Timeframe: D1
- Recommendation: Short Position
- Entry Level: Short Position @ 1.5040
- Take Profit Zone: 1.4875 – 1.4905
- Stop Loss Level: 1.5090
Should price action for the EURCAD breakout above 1.5070 the following trade set-up is recommended:
- Timeframe: D1
- Recommendation: Long Position
- Entry Level: Long Position @ 1.5100
- Take Profit Zone: 1.5220 – 1.5305
- Stop Loss Level: 1.5070
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