Inflation data out of the UK will be in focus as more Brexit details will be announced. Economists expect a mild up-tick in inflation for September. The British Pound has rallied sharply to four month highs as optimism about a Brexit deal rose. The Bank of England will monitor inflation closely and is expected to increase interest rates as soon as next year while other central banks are easing monetary policy. How will today’s inflation data impact the GBPCAD? Today’s fundamental analysis will take a look at price action in both directions.
Forex traders will also get Canadian inflation data which is expected to show a monthly decrease. While this won’t go unnoticed, most traders will likely await the outcome of Canadian elections which will be held next Monday, October 21st 2019. Expectations call for current PM Trudeau to remain in power, but he has been faced with the so-called “brownface scandal”.The GBPCAD has rallied sharply on the back of a strong pound, will bulls push higher or are bears going to force a reversal? Subscribe to the PaxForex Daily Fundamental Analysis and earn over 5,000 pips per month.
Here are the key factors to keep in mind today for British Pound trades:
- UK CPI: The UK CPI for September is predicted to increase by 0.2% monthly and by 1.8% annualized. Forex traders can compare this to the UK CPI for August which increased by 0.4% monthly and by 1.7% annualized. The Core CPI for September is predicted to increase by 1.7% annualized and the CPI Including Housing Costs is predicted to increase by 1.8% annualized. Forex traders can compare this to Core CPI for August which increased by 1.5% annualized and to the CPI Including Housing Costs which increased by 1.7% annualized.
- UK PPI: The UK PPI Input for September is predicted to increase by 0.2% monthly and to decrease by 1.8% annualized. Forex traders can compare this to the UK PPI Input for August which decreased by 0.1% monthly and by 0.8% annualized. The UK PPI Output for September is predicted to increase by 0.1% monthly and by 1.3% annualized. Forex traders can compare this to the UK PPI Output for August which decreased by 0.1% monthly and which increased by 1.6% annualized. The UK PPI Core Output for September is predicted to increase by 0.1% monthly and by 1.9% annualized. Forex traders can compare this to the UK PPI Core Output for August which increased by 0.2% monthly and by 2.0% annualized.
- UK RPI: The UK RPI for September is predicted flat at 0.0% monthly and to increase by 2.7% annualized. Forex traders can compare this to the UK RPI for August which increased by 0.8% monthly and by 2.6% annualized. The UK RPI Excluding Mortgage Interest Payments for September is predicted to increase by 2.6% annualized. Forex traders can compare this to the UK RPI Excluding Mortgage Interest Payments for August which increased by 2.6% annualized.
- UK House Price Index: The UK House Price Index for August is predicted to increase by 0.6% annualized. Forex traders can compare this to the UK House Price Index for July which increased by 0.7% annualized.
Here is the key factor to keep in mind today for Canadian Dollar trades:
- Canadian CPI: The Canadian CPI for September is predicted to decrease by 0.3% monthly and to increase by 2.1% annualized. Forex traders can compare this to the Canadian CPI for August which decreased by 0.1% monthly and which increased by 1.9% annualized. The Canadian Core CPI for September is predicted to increase by 1.8% annualized. Forex traders can compare this to the Canadian Core CPI for August which increased by 1.8% annualized. The Core CPI-Median for September is predicted to increase by 2.2% annualized and the Core CPI-Trim is predicted to increase by 2.1% annualized. Forex traders can compare this to the Core CPI-Median for August which increased by 2.1% annualized and to the Core CPI-Trim which increased by 2.1% annualized.
Should price action for the GBPCAD remain inside the or breakdown below the 1.6815 to 1.6910 zone the following trade set-up is recommended:
- Timeframe: D1
- Recommendation: Short Position
- Entry Level: Short Position @ 1.6835
- Take Profit Zone: 1.6355 – 1.6440
- Stop Loss Level: 1.6960
Should price action for the GBPCAD breakout above 1.6910 the following trade set-up is recommended:
- Timeframe: D1
- Recommendation: Long Position
- Entry Level: Long Position @ 1.6960
- Take Profit Zone: 1.7135 – 1.7180
- Stop Loss Level: 1.6910
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