Source: PaxForex Premium Analytics Portal, Fundamental Insight

The US PPI for November is predicted to increase by 0.2% monthly and 7.2% annualized. Forex traders can compare this to the US PPI for October, which rose 0.2% monthly and 8.0% annualized. The US Core PPI for November is predicted to expand by 0.2% monthly and 5.9% annualized. Forex traders can compare this to the US Core PPI for October, which was flat at 0.0% monthly and rose 6.7% annualized.

US Preliminary Wholesale Inventories for October are predicted to increase by 0.8% monthly. Forex traders can compare this to US Wholesale Inventories for September, which rose 0.6% monthly.

Preliminary US Michigan Consumer Sentiment for December is predicted at 56.9. Forex traders can compare this to US Michigan Consumer Confidence for November, reported at 56.8. Preliminary Current Conditions for December are expected at 58.0, and Preliminary Expectations at 56.0. Forex traders can compare this to Current Conditions for November, reported at 58.8, and Expectations, reported at 55.6.

The Canadian Capacity Utilization Rate for the third quarter is predicted at 82.2%. Forex traders can compare this to the Canadian Capacity Utilization Rate for the second quarter, reported at 83.6%.

With inflation continuing to pressure consumers and businesses, the US Department of Agriculture (USDA) World Agricultural Supply and Demand Estimates Report (WASDE) receives additional attention from traders. The cost of living crisis, which is the worst in four decades, is likely to result in a deep and long recession. Central banks will continue to raise interest rates and drain liquidity, creating a perfect storm for bears to thrive. The US labor market began to show cracks, and traders should expect a slow start to the pending bear market sell-off this month before downside pressures accelerate to start 2023.

The forecast for the USD/CAD remains bearish after the descending Senkou Span A of the Ichimoku Kinko Hyo Cloud rejected this currency pair. A negative crossover followed, and downside pressure increased. Adding to the negative outlook for price action is the descending Kijun-sen, which completed a bearish crossover below the flat Tenkan-sen. Traders should monitor the CCI for their final sell signal after this technical indicator has set a lower high in extreme overbought territory, followed by a breakdown below 100, with more downside potential. Can bears maintain selling pressure on the USD/CAD and force price action into its horizontal support 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 breakdown below the 1.3560 to 1.3650 zone, PaxForex recommends the following trade set-up:

• Time frame: D1
• Recommendation: Short position
• Entry Level: Short Position @ 1.3590
• Take Profit Zone: 1.3205 – 1.3305
• Stop Loss Level: 1.3700

Alternative scenario: 

Should price action for the USD/CAD breakout above 1.3650, PaxForex recommends the following trade set-up:

• Time frame: D1
• Recommendation: Long Position
• Entry Level: Long Position @ 1.3700
• Take Profit Zone: 1.3775 – 1.3810
• Stop Loss Level: 1.3650

Open your PaxForex Trading Account now and add this currency pair to your forex portfolio.