After a wild trading week which featured plenty of market moving economic reports as well as geopolitical developments, forex traders will get a light Friday afternoon session. The PPI report out of the US will be more closely watched than usual as the US Fed is expected to lower interest rates again in September. The lack of inflation as well as inflationary pressures could further boost sentiment for an interest rate cut. How will the US Dollar react? The USDCAD has entered a corrective phase, an it extend further to the downside? Subscribe to the PaxForex Daily Fundamental Analysis and join our fast growing community of profitable forex traders!
Canada will release its key employment report and economists predict net job gains for July after June unexpected job losses. The Canadian labor market is seeing wage based inflation which may prevent the Bank of Canada to cut interest rates, giving a boost to the Canadian Dollar. A strong employment report is expected to push price action further to the downside. Will today’s data result in a new wave of sell orders for the USDCAD? Today’s fundamental analysis will take a look at the upside and downside potential of this currency pair.
Here is the key factor to keep in mind today for US Dollar trades:
- US PPI: The US PPI for July is predicted to increase by 0.2% monthly and by 1.7% annualized. Forex traders can compare this to the US PPI for June which increased by 0.1% monthly and 1.7% annualized. The US Core PPI for July is predicted to increase by 0.1% monthly and by 2.3% annualized. Forex traders can compare this to the US Core PPI for June which increased by 0.3% monthly and by 2.3% annualized. The US Core PPI ex Trade for July is predicted to increase by 0.2% monthly and by 2.1% annualized. Forex traders can compare this to the US Core PPI ex Trade for June which was reported flat at 0.0% monthly and which increased by 2.1% annualized.
Here are the key factors to keep in mind today for Canadian Dollar trades:
- Canadian Housing Starts and Building Permits: Canadian Housing Starts for July are predicted at 202.0K. Forex traders can compare this to Canadian Housing Starts for June which were reported at 245.7K. Canadian Building Permits for June are predicted to increase by 1.0% monthly. Forex traders can compare this to Canadian Building Permits for May which decreased by 13.0% monthly.
- Canadian Employment Report: The Canadian Employment Report for July is predicted to show the addition of 15.0K jobs and an Unemployment Rate of 5.5%. Forex traders can compare this to the Canadian Employment Report for June which showed the loss of 2.2K jobs and an Unemployment Rate of 5.5%. Hourly Earnings for Permanent Employees for July are predicted to increase by 3.8% annualized. Forex traders can compare this to Hourly Earnings for Permanent Employees for June which increased by 3.6% annualized. 5.1K Full-Time Positions and 9.9K Part-Time Positions are expected to have been created in July. Forex traders can compare this to the creation of 24.1K Full-Time Positions and to the loss of 26.2K Part-Time Positions which were reported in June. The Labor Force Participation Rate for July is expected at 65.7%. Forex traders can compare this to the Labor Force Participation Rate for June which was reported at 65.7%.
USDCAD Trading Set-Up for August 9th 2019
Should price action for the USDCAD remain inside the or breakdown below the 1.3185 to 1.3245 zone the following trade set-up is recommended:
- Timeframe: D1
- Recommendation: Short Position
- Entry Level: Short Position @ 1.3220
- Take Profit Zone: 1.3015 – 1.3060
- Stop Loss Level: 1.3265
Should price action for the USDCAD breakout above 1.3245 the following trade set-up is recommended:
- Timeframe: D1
- Recommendation: Long Position
- Entry Level: Long Position @ 1.3275
- Take Profit Zone: 1.3380 – 1.3430
- Stop Loss Level: 1.3220
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