2023-05-22 • Updated
It seems like the Canadian consumer has a firm grip on their wallet, which is no surprise given the current economic climate. Inflation in April crept up from 4.3% to 4.4%, adding to the financial woes. With soaring interest rates, it's no wonder consumers are feeling the pinch. Brace yourselves for the April retail sales report, which is expected to bring more bad news. Headline retail sales are predicted to slow to -1.4%, while the core rate is anticipated to fall to -0.8%. Not exactly the recipe for economic growth, right? If the report confirms these predictions, it might shake up investors and send the Canadian dollar on a downward spiral. The Bank of Canada won't be thrilled with the slight increase in inflation, but at least the core rate, a more reliable gauge, moved lower. Keep an eye on the BoC's meeting on June 7th, where interest rates are expected to remain at 4.50%. As for the US, it's a quiet day on the economic calendar, but we do have Jerome Powell and two FOMC members delivering public remarks. The market sentiment surrounding the June meeting has shifted, with a reduced chance of a pause and a higher chance of a 25 basis points hike. The Fed's consistently hawkish stance and a strong US economy have played a part in this revision.
EURCAD - H4 Timeframe
EURCAD closed last week with a major reaction off the pivot zone, after having broken out of the channel. Considering the bullish array of the Moving Averages, the reaction from the pivot zone, and the 100-Day moving average support, I believe price would attempt to reach for the 50-Day moving average; or slightly higher even. Based on the bearish outlook of the fundamental analysis as explained earlier, I have reasons to believe this is the logical direction to go for EURCAD.
Analyst’s Expectations:
Direction: Bullish
Target: 1.47029
Invalidation: 1.45055
AUDCAD - Daily Timeframe
AUDCAD is trading within a descending channel at the moment, and seems to be in search of a valid supply zone from which it can recover sufficient momentum to continue its decline. It is on this ground that I have marked out the nearest supply zone that most readily provides the kind of confluences I like to see; a trendline resistance, rally-base-drop supply zone, as well as the 100 and 200 Day moving averages resistance - sweet confluences worth trading from my experience.
Analyst’s Expectations:
Direction: Bearish
Target: 0.88859
Invalidation: 0.90890
GBPCAD - Daily Timeframe
In the case of GBPCAD, the price action presents a largely bullish scenario. On the chart, we can see the price trading within a rising channel with the latest reaction being a bounce off the trendline support. My confluences on this trade include: the trendline support, 50-Day moving average support, overall bullish moving averages array, and the bullish market structure (since price recently broke above a previous high).
Analyst’s Expectations:
Direction: Bullish
Target: 1.72459
Invalidation: 1.67055
CONCLUSION
The trading of CFDs comes at a risk. Thus, to succeed, you have to manage risks properly. To avoid costly mistakes while you look to trade these opportunities, be sure to do your due diligence and manage your risk appropriately.
You can access more of such trade ideas and prompt market updates on the telegram channel.
Hey folks, it’s a wrap to yet another month in the 2023 calendar, and I’m guessing you know what that means - time for another episode in the “What To Trade” series. For December, I will be mapping out trade more cautiously as the market volatility often drops
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