The Australian dollar is set to move in a few hours as we’ll get the latest view on Australia’s employment sector. What are the expectations and will it be enough to breakout AUD/CAD from consolidation?
Before moving on, ICYMI, today’s Daily U.S. Session Watchlist looked at a potential swing trade opportunity on EUR/CAD, so be sure to check that out to see if there is still a potential play!
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Fresh Market Headlines & Economic Data:
Upcoming Potential Catalysts on the Economic Calendar
Japan Tankan Index at 11:00 pm GMT
Japan Trade Balance, Machinery Orders at 11:50 pm GMT
Australia Employment change, Unemployment rate at 1:30 am GMT (May 20)
Germany PPI at 6:00 am GMT (May 20)
Euro area Current Account at 8:00 am GMT (May 20)
Euro area Construction Output at 9:00 am GMT (May 20)
Bank of England Cunliffe speech at 9:05 am GMT (May 20)
U.K. Industrial Trends Orders at 10:00 am GMT (May 20)
What to Watch: AUD/CAD
It looks like traders have been on the sidelines with AUD/CAD over the last few sessions as the pair seems to be tightening up between 0.9350 – 0.9420.
It’s likely they’ve been waiting on the upcoming Australian jobs data this week before making fresh moves, which is set to release on Thursday at 2:30pm GMT. Check out Forex Gump’s Event Preview to get the details before the event.
So, we’ve got a simple consolidation breakout forming at the moment on the one hour chart above, and with expectations of weaker data in April versus March, there is a possibility that the descending triangle pattern in the works above could lead to a downside breakout.
If that’s the case on weak Aussie jobs data, look out for the market to hold below the 0.9340 level before considering a short position, either at market or after a bounce back into the consolidation area.
If we’re surprised with better-than-expected Australian employment data, look out for a break above the falling ‘highs’ pattern marked on the chart above before considering a long position.
This scenario could draw in technical buyers and fundamental players who may be looking to short the Loonie if oil prices continue to dip on rising pandemic fears.