Fundamental Overview
Analysts expect raises on inflation and retail sales data.
The Canadian Dollar will be the driver currency of this Friday 22nd trading session, with the release of Inflation and Core Retail Sales data. Analysts expect the Consumer Price Index (CPI) for the month of May to rise to 0.4%, driven mainly by the increase in fuel and food prices; with this increase, the CPI (YoY) estimated should reach 2.5%, being higher than the 2.2% reported in April.
On the other hand, analysts foresee that core retail sales (MoM) would rise to 0.5% during the month of April, which represents an optimistic scenario since the contraction of 0.2% reported in March.
This data could contribute to the scenario of a possible hike in the interest rate by the Bank of Canada (BoC), being in line with what was commented by the BoC Governor Stephen Poloz, who stated that he expects an increase in the interest rate soon.
Technical Analysis
EURUSD
EURUSD bounced from the lowest level in three weeks from 1.1507 to 1.1633. Our vision is that the common currency could make a limited recovery to the 1.17 area before we see fresh lows likely in the 1.1425 zone. Invalidation level of the mid-term bearish cycle is 1.1852.
GBPUSD
GBPUSD bounced from the PRZ forecasted at 1.3109 aided by the Bank of England (BoE) monetary policy decision. Now we should see fresh higher highs and lower highs to validate the change in bias. The short-term resistance level is at 1.3298.
USDCHF
The USDCHF pair broke down the short-term ascending trendline. Now we expect that the price tests the long-term ascending trendline. Our main vision for USDCHF is that it could make a new bearish leg with first support at the 0.98 level, and 0.9788 as the second support.
EURCAD
EURCAD could make a new higher high in the upper line of the ascending channel with a target in the 1.5533 area. After this move, if the price breaks down the short-term ascending trendline, we should see a flag pattern as a continuation of the previous movement.
GBPCAD
GBPCAD is developing in an ascending wedge, which could see fresh highs at the 1.7732 level, as a false breakout before it falls to the long-term ascending trendline. The first support level to watch out for is 1.7455.
FTSE 100
FTSE 100 continued falling for the fifth consecutive week. In the current session, it tested support at 7,548, the low reached on June 18th. Our vision for the British index is that it could complete the corrective sequence in the 7,400 area, from where FTSE could build a new bullish connector.
DAX 30
As was commented in our previous Daily Update, the DAX 30 is moving bearish, developing a Dead Cat Bounce Pattern. In the current trading session, the German index has fallen below the May 31st low at 12,547.6. The next support level is in the 12,300 area, from where we foresee the DAX should start to bounce.
