Canada is gearing up to print its retail sales report while this pair looks prime for a pullback!
Will this CAD/CHF area of interest hold?
Before moving on, ICYMI, yesterday’s watchlist looked at the U.S. dollar index (DXY) breakdown and reversal. 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:
Australian flash manufacturing PMI up from 57.7 to 57.9Australian flash services PMI up from 55.6 to 56.6
Japanese flash manufacturing PMI fell from 54.1 to 53.4
U.K. retail sales sank by 1.4% vs. projected 0.3% dip, previous 0.5% decline
Japanese finance minister Suzuki hints at joint FX intervention with U.S.
Suzuki: Rapid FX moves will be monitored closely
French flash services PMI up from 57.4 to 58.8 vs. 56.4 forecast
French flash manufacturing PMI up from 54.7 to 55.4 vs. 53.7 forecast
German flash manufacturing PMI slipped from 56.9 to 54.1 vs. 54.6 estimate
German flash services PMI rose from 56.1 to 57.9 vs. 55.4 consensus
Upcoming Potential Catalysts on the Forex Economic Calendar:
U.K. flash manufacturing and services PMIs at 8:30 am GMT
Canadian retail sales at 12:30 pm GMT
ECB head Lagarde’s speech at 1:00 pm GMT
U.S. flash manufacturing and services PMIs at 1:45 pm GMT
BOE Governor Bailey’s speech at 2:30 pm GMT
Use our new Currency Heat Map to quickly see a visual overview of the forex market’s price action! 🔥 🗺️
What to Watch: CAD/CHF
I’m keeping close tabs on this textbook break-and-retest setup on CAD/CHF today!
Aren’t those inflection points lining up quite nicely?The former resistance around the .7500 major psychological level is right around the 50% Fib and 200 SMA dynamic support, which might be a prime entry spot for Loonie bulls.
Technical indicators confirm that support levels are more likely to hold than to break. The 100 SMA is above the 200 SMA to reflect the presence of bullish momentum while Stochastic is reflecting oversold conditions already.
I’d probably wait for the oscillator to pull higher to indicate that buyers are ready to return. A shallow pullback could already find support at the 38.2% level while a larger retracement could reach the line in the sand at the 61.8% Fib or .7460.
The upcoming release of Canada’s retail sales report seems like a good catalyst to watch. Analysts are projecting slower consumer spending for February, with the headline figure slated to show a 0.4% drop and the core reading likely to print a meager 0.4% uptick.
Stronger than expected results might spur a big bounce for CAD/CHF, as this could fuel BOC tightening hopes for their next meeting.