RBA’s meeting minutes dragged on the Aussie earlier today. Can the bears sustain their momentum? Or will the next sessions’ catalysts push AUD/CAD higher?
Currency Snapshot:
Fresh Market Headlines & Economic Data:
- US extends license to allow sales to China’s Huawei for another 90 days
- Trump, Powell met Monday at White House to discuss economy
- Low demand global demand for logs weighs on NZ’s producer prices in September
- Kuroda: BOJ can still deepen negative rates, within limits
- Kuroda: BOJ conducting research on digital currency
- RBA seriously considered November rate cut
- RBA: There was a case to wait and assess the effects of previous stimulus
Upcoming Potential Catalysts on the Forex Calendar:
- Switzerland’s trade balance at 7:00 am GMT
- Euro Zone’s current account at 9:00 am GMT
- U.K.’s CBI industrial order expectations at 11:00 am GMT
- Canada’s manufacturing sales at 1:30 pm GMT
- U.S. building permits at 1:30 pm GMT
What to Watch: AUD/CAD
Traders sold the Aussie like there’s no tomorrow when RBA’s meeting minutes suggested that members had considered another rate cut in November.
Turned out, they were worried over the economic slowdown of Australia’s major trading partners; contraction in housing construction activity; consumption outlook; wage growth; inflation, and domestic growth. Basically, today’s papers point to RBA members cutting their rates in February when they next meet.
In the meantime, traders could price in the Loonie’s lack of support. See, U.S.-China trade concerns are keeping crude oil prices low. Canada hasn’t been printing stellar reports either.
If today’s Canadian manufacturing sales report prints a contraction like analysts are expecting, then we could see AUD/CAD bounce near the ascending channel support on the 1-hour chart. Given AUD/CAD’s daily volatility profile, the .9000 major psychological handle would make for a good profit target.
But if today’s report, along with tomorrow’s CPI data print to the upside, then AUD/CAD can finally break below the channel and trade around the .8940 or .8900 previous areas of interest.
