Asian session trading was a snoozer for most forex traders. That doesn’t mean things aren’t about to get interesting though!
Fresh Market Headlines & Economic Data:
- New Zealand manufacturing sector returns to expansion
- RBNZ’s Orr: Better to prepare for unconventional monetary policy tools “while the sun is shining”
- RBA’s Debelle: Non-performing loans pose little risk to financial institutions
- Poloz: Tech developments need to be accommodated by monetary policy
- Japan’s monthly and annualized industrial production revised higher
- Kudlow: Phase one trade deal with China “down to the short strokes”
- Kudlow: White House working on tax cut package to be implemented on Trump’s second term
Upcoming Potential Catalysts on the Forex Calendar:
- Italy’s trade balance at 9:00 am GMT
- Euro Zone’s final CPI at 10:00 am GMT
- Euro Zone’s trade balance at 10:00 am GMT
- U.S. retail sales at 1:30 pm GMT. Read our event preview if you’re trading the event!
What to Watch: USD/CAD
There are no top-tier reports scheduled during the London session, so focus will likely turn to the U.S. retail sales release during the U.S. session.
In case you missed the event preview, analysts see the report rebounding in October after surprising markets with contractions in September.
On the other side of the trade, the Loonie has been taking hits on higher crude oil inventories and doubts over just how close the U.S. and China are to signing phase one of their trade deal.
USD/CAD is currently testing an ascending channel support that’s also just above the 100 SMA on the 1-hour chart. If the U.S. retail sales data comes in as expected, then we could see the dollar extend its gains against the Loonie and revisit its 1.3270 highs.
But wait! A quick look at USD/CAD’s MarketMilk trend profile shows a potential reversal for the pair. Shorter-term SMAs are signaling a bearish trend, while longer-term SMAs point to USD/CAD’s trend as “bullish but possibly weakening.”
Planning on trading the pair? Take note that USD/CAD has been moving by at least 15 pips PER HOUR during the U.S. session for the past 30 days. Something to keep in mind when setting your stop losses!