US housing data will grab the attention of forex traders, together with a regional economic report anticipated to show a sharp slowdown for December. The House Price Index is called slightly higher, and economists expect a rebound in existing home sales. With the USDCAD pressuring its horizontal resistance level, how will this currency pair react following the release of today’s economic data? Subscribe to the PaxForex Daily Fundamental Analysis and grow your balance trade-by-trade.
Markets expect the Bank of Canada to maintain interest rates at 1.75%. The Canadian central bank opened the door to an interest rate cut but annualized inflation is running above the 2.0% target, keeping the BoC sidelined. Canadian housing prices are anticipated to come in flat. Can bulls step in and force a breakout in the USDCAD, or will bears pressure for a reversal? Today’s fundamental analysis will take a look at the upside potential as well as the downside risk in this currency pair.
Here are the key factors to keep in mind today for US Dollar trades:
- US Chicago Fed National Activity Index: The US Chicago Fed National Activity Index for December is predicted at 0.15. Forex traders can compare this to the US Chicago Fed National Activity Index for November, which was reported at 0.56.
- US House Price Index: The US House Price Index for November is predicted to increase by 0.3% monthly. Forex traders can compare this to US House Price Index for October, which increased by 0.2% monthly.
- US Existing Home Sales: US Existing Home Sales for December are predicted to increase by 1.5% monthly to 5.43M. Forex traders can compare this to US Existing Home Sales for November, which decreased by 1.7% monthly to 5.35M.
Here are the key factors to keep in mind today for Canadian Dollar trades:
- Canadian New Housing Price Index: The Canadian New Housing Price Index for December is predicted flat at 0.0% monthly and to decrease by 0.1% annualized. Forex traders can compare this to the Canadian New Housing Price Index for November, which decreased by 0.1% monthly, and which was reported flat at 0.0% annualized.
- Canadian CPI: The Canadian CPI for December is predicted flat at 0.0% monthly and to increase by 2.3% annualized. Forex traders can compare this to the Canadian CPI for November, which decreased by 0.1% monthly, and which increased by 2.2% annualized. The Canadian Core CPI for December is predicted to increase by 1.9% annualized. Forex traders can compare this to the Canadian Core CPI for November, which increased by 1.9% annualized. The Core CPI-Median for December is predicted to increase by 2.4% annualized and the Core CPI-Trim is predicted to increase by 2.2% annualized. Forex traders can compare this to the Core CPI-Median for November, which increased by 2.4% annualized and to the Core CPI-Trim, which increased by 2.2% annualized.
- Bank of Canada Interest Rate Decision: The Bank of Canada is predicted to keep interest rates unchanged at 1.75%. Forex traders can compare this to the previous Bank of Canada Interest Rate Decision where interest rates were kept unchanged at 1.75%.
Should price action for the USDCAD remain inside the or breakdown below the 1.3055 to 1.3100 zone the following trade set-up is recommended:
- Timeframe: D1
- Recommendation: Short Position
- Entry Level: Short Position @ 1.3075
- Take Profit Zone: 1.2780 – 1.2815
- Stop Loss Level: 1.3120
Should price action for the USDCAD breakout above 1.3100 the following trade set-up is recommended:
- Timeframe: D1
- Recommendation: Long Position
- Entry Level: Long Position @ 1.3120
- Take Profit Zone: 1.3270 – 1.3320
- Stop Loss Level: 1.3075
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