Source: PaxForex Premium Analytics Portal, Fundamental Insight
UK CPI for March is predicted to increase 0.7% monthly and 6.7% annualized. Forex traders can compare this to UK CPI for February, which rose 0.8% monthly and 6.2% annualized. The Core CPI for March is predicted to expand by 0.5 monthly and 5.4% annualized. Forex traders can compare this to Core CPI for February, which increased 0.8% monthly and 5.2% annualized.
UK PPI Input for March is predicted to increase 2.5% monthly and 13.9% annualized. Forex traders can compare this to UK PPI Input for February, which rose 1.4% monthly and 14.7% annualized. UK PPI Output for March is predicted to expand 1.2% monthly and 11.1% annualized. Forex traders can compare this to UK PPI Output for February, which increased 0.8% monthly and 10.1% annualized.
UK RPI for March is predicted to rise 0.9% monthly and 8.8% annualized. Forex traders can compare this to UK RPI for February, which rose 0.8% monthly, and 8.2% annualized.
The Bank of Canada is likely to increase interest rates by 50 basis points to 1.00%. Forex traders can compare this to the previous Bank of Canada Interest Rate Decision, where the central bank raised interest rates by 25 basis points to 0.50%. The more aggressive interest rate increase follows the Bank of New Zealand announcement this morning, where it hiked rates by 50 basis points to 1.50%.
The US Federal Reserve announced that a 50 basis point interest rate increase is on the table for the next meeting, as central banks are behind the inflationary curve, running at 40-year highs. Wage growth cannot keep up with inflation, adding wage-based pressures while lowering disposal income for consumers. It may lead to an economic slowdown, as suggested by the bear market in global equities and inverted yield curves. It would force more interest rate increases and creates a stagflationary environment.
The forecast for the GBP/CAD remains bullish after this currency pair stabilized inside its horizontal support area. After the Tenkan-sen flatlined, the Kijun-sen has shown signs of doing the same, confirming the lack of short-to-medium-term bearish pressures. The Ichimoku Kinko Hyo Cloud maintains downside pressure, but the Senkou Span B flatlined, suggesting a possible end to the move lower. Traders should monitor the CCI following its breakout from extreme oversold territory. It crossed above zero and has more upside potential if it can stay in positive conditions. Will bulls push the GBP/CAD farther to the upside and 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 GBP/CAD remain inside the or breakout above the 1.6385 to 1.6475 zone, PaxForex recommends the following trade set-up:
- Timeframe: D1
- Recommendation: Long Position
- Entry Level: Long Position @ 1.6415
- Take Profit Zone: 1.6800 – 1.6900
- Stop Loss Level: 1.6290
Should price action for the GBP/CAD breakdown below 1.6385, PaxForex recommends the following trade set-up:
- Timeframe: D1
- Recommendation: Short Position
- Entry Level: Short Position @ 1.6290
- Take Profit Zone: 1.5955 – 1.6050
- Stop Loss Level: 1.6385
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