High level trade talks will begin in Washington today and sources claim that the Chinese delegation is willing to work out a partial trade deal. Markets rallied yesterday after the comments were leaked, but the Trump administration has repeatedly ruled out a partial trade deal. New tariffs are set to kick in on October 15th 2019 and conflicting reports for today’s negotiations have already caused a spike in volatility. Forex traders will also receive inflation data and two reports on the labor market. How will this impact the USDCAD? Today’s fundamental analysis will take a look at the downside potential as well as the upside risk in this currency pair.
Canadian housing data will be released today, but the majority of traders will pat attention to trade talks between the US and China. Canadian elections will also start to impact trading decisions in the short-term, election day is on October 21st 2019. Oil prices have retreated from its price spike which gave traders another excuse to take profits in the Canadian Dollar. How will the USDCAD react to today’s economic data? Subscribe to the PaxForex Daily Fundamental Analysis and earn over 5,000 pips per month.
Here are the key factors to keep in mind today for US Dollar trades:
- US CPI: The US CPI for September is predicted to increase by 0.1% monthly and by 1.8% annualized. Forex traders can compare this to the US CPI for August which increased by 0.1% monthly and by 1.7% annualized. The US Core CPI for September is predicted to increase by 0.2% monthly and by 2.4% annualized. Forex traders can compare this to the US Core CPI for August which increased by 0.3% monthly by 2.4% annualized.
- US Initial Jobless Claims and Continuing Claims: US Initial Jobless Claims for the week of October 5th are predicted at 218K and US Continuing Claims for the week of September 28th are predicted at 1,651K. Forex traders can compare this to US Initial Jobless Claims for the week of September 28th which were reported at 219K and to US Continuing Claims for the week of September 21st which were reported at 1,651K.
- US Real Average Hourly Earnings: US Real Average Hourly Earnings for September are predicted to increase by 0.5% monthly and by 1.3% annualized. Forex traders can compare this to US Real Average Hourly Earnings for August which increased by 0.6% monthly and by 1.5% annualized.
Here is the key factor to keep in mind today for Canadian Dollar trades:
- Canadian New Housing Price Index: The Canadian New Housing Price Index for August is predicted to decrease by 0.1% monthly and by 0.4% annualized. Forex traders can compare this to the Canadian New Housing Price Index for July which decreased by 0.1% monthly and by 0.4% annualized.
Should price action for the USDCAD remain inside the or breakdown below the 1.3295 to 1.3345 zone the following trade set-up is recommended:
- Timeframe: D1
- Recommendation: Short Position
- Entry Level: Short Position @ 1.3315
- Take Profit Zone: 1.3135 – 1.3185
- Stop Loss Level: 1.3375
Should price action for the USDCAD breakout above 1.3345 the following trade set-up is recommended:
- Timeframe: D1
- Recommendation: Long Position
- Entry Level: Long Position @ 1.3375
- Take Profit Zone: 1.3520 – 1.3565
- Stop Loss Level: 1.3345
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