Source: PaxForex Premium Analytics Portal, Fundamental Insight
UK CBI Industrial Industrial Trends Orders for June are predicted at 22. Forex traders can compare this to CBI Industrial Trends Orders for May, reported at 26.
Canadian Retail Sales for April are predicted to rise 0.8% monthly, and Canadian Core Retail Sales by 0.6% monthly. Forex traders can compare this to Canadian Retail Sales for March, which increased 0.2% monthly, and to Canadian Core Retail Sales, which rose 2.4% monthly.
The Canadian New Housing Price Index for May is predicted to increase 0.6% monthly. Forex traders can compare this to the Canadian New Housing Price Index for April, which rose 0.3% monthly.
Yesterday’s light trading session featured little economic data, but the reports confirmed three of the current market trends. Inflation remains higher than forecast, as the German PPI for May clocked in moderately higher than economists expected. Economic performance extends its slowdown, evident by weaker Eurozone construction output, and government bond yields resume their gains. The German 12-month Bund auction yielded positive, surging to 0.693% from the previous -0.107%. It could signal that the European Central Bank may engage in a more hawkish stance than previously communicated.
The 12-month French and 5-year JGB bond auctions also saw higher yields as borrowing costs continued to rise globally. It will take several months for interest rate hikes to filter through the system, and effects may not completely materialize until early 2023. Today’s session is likely to remain calm, but traders will get Hong Kong CPI and US existing home sales. The cryptocurrency market stabilized over the past two sessions but may face another leg down until Bitcoin challenges the 14,000 level. The Bank of England remains the only central bank with an honest assessment of stagflationary conditions ahead. The British Pound completed most of its selling, granting it more upside potential than downside risk.
The forecast for the GBP/CAD remains bullish despite the minor pullback from its current rally. This currency pair formed a flag formation, and the Kijun-sen and the Tenkan-sen turned sideways. Adding to bullishness is the Ichimoku Kinko Hyo Cloud, which shows signs of stabilizing as the Senkou Span B is flatlining. Traders should expect an increase in volatility with the CCI in extreme overbought territory. This technical indicator has to complete a breakdown before traders consider more buy orders. Can bulls maintain control of the GBP/CAD and push price action 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 1.5830 to 1.5950 zone, PaxForex recommends the following trade set-up:
- Timeframe: D1
- Recommendation: Long Position
- Entry Level: Long Position @ 1.5875
- Take Profit Zone: 1.6295 – 1.6415
- Stop Loss Level: 1.5745
Should price action for the GBP/CAD breakdown below 1.5830, PaxForex recommends the following trade set-up:
- Timeframe: D1
- Recommendation: Short Position
- Entry Level: Short Position @ 1.5745
- Take Profit Zone: 1.5480 – 1.5580
- Stop Loss Level: 1.5830
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