Source: PaxForex Premium Analytics Portal, Fundamental Insight
The US CPI for May is predicted to rise 0.7% monthly and 8.3% annualized. Forex traders can compare this to the US CPI for April, which increased 0.3% monthly and 8.3% annualized. The US Core CPI for May is predicted to expand 0.5% monthly and 5.9% annualized. Forex traders can compare this to the US Core CPI for April, which rose 0.6% monthly and 6.2% annualized.
Preliminary US Michigan Consumer Sentiment for June is predicted at 58.0. Forex traders can compare this to US Michigan Consumer Confidence for May, reported at 58.4. Preliminary Current Conditions for June are expected at 62.5, and Preliminary Expectations at 54.5. Forex traders can compare this to Current Conditions for May, reported at 63.3, and Expectations at 55.2.
The Canadian Employment Report for May is predicted to show the addition of 30.0K jobs and an Unemployment Rate of 5.2%. Forex traders can compare this to the Canadian Employment Report for April, which showed the addition of 15.3K jobs and an Unemployment Rate of 5.3%.
The Canadian Capacity Utilization Rate for the first quarter is predicted at 82.2%. Forex traders can compare this to the Canadian Capacity Utilization Rate for the fourth quarter, reported at 82.9%.
Following another heavy week of selling, financial markets may close today’s session in the red. Inflation reports out of Spain, and the US, could show the monthly pace accelerated, which is likely to result in more downside pressure. Yesterday, the ECB remained more dovish than inflation required, confirming a 25 basis point interest rate hike next month, placing it well behind the curve. Chinese and Japanese inflation for May came in weaker than forecast, and the collapse of the Japanese Yen remains a story Forex traders must follow. The Bank of Japan is unlikely to remain idle and allow the uncontrollable depreciation, which harms domestic consumers but favors exporters.
The forecast for the USD/CAD turned bearish after this currency pair spiked into its Ichimoku Kinko Hyo Cloud. It shows signs of bearishness as its Senkou Span A descends with a flat Senkou Span B. Adding to downside pressure is the descending Tenkan-sen and the downward drifting Kijun-sen. The CCI accelerated out of extreme oversold conditions and above the zero level. Traders should monitor for a lower high and reversal in this technical indicator below zero, likely to attract sellers. Can bears reverse 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 1.2655 to 1.2725 zone, PaxForex recommends the following trade set-up:
- Time frame: D1
- Recommendation: Short position
- Entry Level: Short Position @ 1.2695
- Take Profit Zone: 1.2400 – 1.2460
- Stop Loss Level: 1.2765
Alternative scenario:
Should price action for the USD/CAD breakout above 1.2725, PaxForex recommends the following trade set-up:
- Time frame: D1
- Recommendation: Long Position
- Entry Level: Long Position @ 1.2765
- Take Profit Zone: 1.2850 – 1.2900
- Stop Loss Level: 1.2715
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