Source: PaxForex Premium Analytics Portal, Fundamental Insight
The Canadian Industrial Product Price Index for July is predicted to decrease by 0.3% monthly, and the Canadian Raw Materials Price Index is predicted to contract by 0.7% monthly. Forex traders can compare this to the Canadian Industrial Product Price Index for June, which came in flat at 0.0% monthly, and to the Canadian Raw Materials Price Index, which dropped by 1.4% monthly.
The Canadian New Housing Price Index for July is predicted flat at 0.0% monthly. Forex traders can compare this to the Canadian New Housing Price Index for June, which dropped 0.2% monthly.
US Crude Oil Inventories Change for the week ending August 16th are predicted to drop by 2.000M. Traders can compare this to US Crude Oil Inventories Change for the week ending August 9th, which rose by 1.357M. US Gasoline Inventories Change for the week ending August 16th are predicted to decrease by 0.790M, and US Distillate Stocks Change to increase by 0.500M. Traders can compare this to US Gasoline Inventories Change for the week ending August 9th, which dropped by 2.894M, and US Distillate Stocks Change by 1.673M.
The US Federal Reserve will release minutes from its last meeting today, and forex traders will look for any potential change in the wording used, which could give insight into future monetary policy adjustments. Markets expect a 25 basis point interest rate cut in September and more aggressive reductions moving forward.
The forecast for the USD/CAD turned bullish after this currency pair corrected into its horizontal support area. Short-term volatility may rise after the bearish crossover between the descending Tenkan-sen and the flat Kijun-sen. The Senkou Span A and the Senkou Span B of the Ichimoku Kinko Hyo Cloud have flatlined and show signs of a bearish bias, which could limit the upside potential. Traders should also monitor the CCI in extreme oversold territory with an upward drift. A breakout by this technical indicator above -100 could trigger the next leg higher. Can bulls regain control over the USD/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 USD/CAD remain inside the or breakout above the 1.3585 to 1.3630 zone, PaxForex recommends the following trade setup:
- Time frame: D1
- Recommendation: Long position
- Entry Level: Long Position @ 1.3615
- Take Profit Zone: 1.3745 – 1.3780
- Stop Loss Level: 1.3535
Alternative scenario:
Should price action for the USD/CAD break down below 1.3585, PaxForex recommends the following trade set-up:
- Time frame: D1
- Recommendation: Short Position
- Entry Level: Short Position @ 1.3535
- Take Profit Zone: 1.3420 – 1.3480
- Stop Loss Level: 1.3585
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