Crude oil prices are on shaky ground, and the U.S. core PCE index is up for release today!
Does this mean it’s time for a USD/CAD breakout?
Before moving on, ICYMI, yesterday’s watchlist looked at USD/JPY’s uptrend pullback ahead of the ADP report. Be sure to check out if it’s still a valid play!
And now for the headlines that rocked the markets in the last trading sessions:
Fresh Market Headlines & Economic Data:
U.S. to release 180 million barrels from its crude oil SPRIEA member nations considering a collective oil release this week
Japanese preliminary industrial production up 0.1% vs. projected 0.5% increase
Australian building approvals jumped 43.5% vs. projected 4.8% gain
Australia to hit Russian imports with 35% tariffs
Chinese official manufacturing PMI slumped from 50.2 to 49.5 vs. 49.7 consensus
Chinese official non-manufacturing PMI down from 51.6 to 48.4 vs. 50.3 forecast
Japanese chief cabinet secretary says they are monitoring FX moves closely
Upcoming Potential Catalysts on the Forex Economic Calendar:
OPEC-JMCC meeting ongoing
U.S. President Biden’s speech coming up
U.S. Challenger job cuts at 11:30 am GMT
Canadian monthly GDP at 12:30 pm GMT
U.S. core PCE price index at 12:30 pm GMT
U.S. initial jobless claims at 12:30 pm GMT
Chicago PMI at 1:45 pm GMT
Use our new Currency Heat Map to quickly see a visual overview of the forex market’s price action! 🔥 🗺️
What to Watch: USD/CAD
Crude oil is back in the spotlight today, with the U.S. government announcing their plans to release 180 million barrels from their reserves in order to keep price gains in check.This could mean some downside for the correlated Loonie, which is testing a key inflection point against the U.S. dollar.
Busting through the descending trend line resistance around the 1.2500 major psychological mark could be enough to spur a reversal from the slide. Technical indicators, however, are painting a different picture.
The 100 SMA is still below the 200 SMA to suggest that the selloff is more likely to resume than to reverse. At the same time, Stochastic is indicating overbought conditions or exhaustion among buyers.
This could all boil down to the release of the U.S. core PCE price index in the next trading session. A much weaker than expected read for the Fed’s preferred inflation measure might dash hopes for back-to-back hikes or a 0.50% increase in borrowing costs for the next FOMC meetings.
Do keep your eyes and ears peeled for any big announcements from the OPEC-JMMC meetings as well!