AUD/CAD pops higher at the start of the new week thanks to positive risk sentiment and another slide in oil prices.
Does the momentum still have legs, or is a pullback in the cards for the rest of the session?
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Fresh Market Headlines & Economic Data:
- Oil prices resume slide on oversupply and storage concerns
- Shares jump as investors cheer lockdown easing, more stimulus
- Next wave of U.S. states set to reopen as coronavirus could push jobless rate to 16%
- Spain eyes more easing of coronavirus lockdown after children reclaim streets
- U.K.’s Boris Johnson rules out swift end to coronavirus lockdown
- Swiss National Bank steps up forex purchases again, data shows
- New Zealand claims ‘elimination’ of coronavirus with new cases in single digits
- Bank of Japan expands stimulus as pandemic pain worsens
- China’s industrial profits sank 34.9% in March
Upcoming Potential Catalysts on the Forex Calendar for U.S. & Asia:
- Japan Unemployment Rate at 11:30 pm GMT
What to Watch: AUD/CAD
With an economic calendar basically void of any top tier catalysts ahead for the rest of the U.S. session we’re checking out AUD/CAD, which is currently on the move thanks to today’s top driving themes of positive risk sentiment and another slide in oil prices.
As mentioned in the Headlines section above, it looks like investors are in a positive mood on risk as economies around the world look to re-open, and oil prices drop on oversupply and storage concerns.
AUD/CAD recently broke above a minor resistance area around the 0.9000 major psychological handle, but not seems to be meeting fresh resistance around the 0.9100.
The move from the open has clocked in near the daily ATR of around 120 pips and the stochastic indicator is signaling potentially overbought conditions, both combined hinting that this move may be overdone for now.
If you’re a bear on AUD/CAD, then this may be the time to grab some quick pips on a pullback from the 0.9100, but keep in mind that this would be counter trend so adjust your risk and entry/exit plans accordingly.
If you’re a bull on the pair it might be a good idea to wait for a pullback, or if you are aggressive, scale in to a short-term long position from current levels down to the 61% Fib / major psychological level. This improves your potential probability of success and potential return-on-risk vs. going all in on a long position after a strong move already.
