Uncle Sam is about to print a bunch of mid-tier economic reports.
Think the releases will extend USD/CAD’s downtrend today?
Before moving on, ICYMI, today’s Daily Asia-London Session Watchlist looked at NZD/USD’s potential bullish run as an upswing gains momentum. Be sure to check that out to see if there is still a potential play!
And now for the headlines that rocked the markets in the last trading sessions:
Fresh Market Headlines & Economic Data:
- China bars banks from selling commodities-linked products to retail buyers
- Australia’s Victoria state to enter COVID-19 lockdown after ‘highly-infectious’ outbreak
- Australia Q1 business investment booms in boost to economy
- U.S., China trade chiefs hold ‘candid’ talks in first call
- China’s industrial profits growth slows in April amid high commodity prices
- RBNZ Gov Orr: monetary conditions could normalise next year
- Dollar firms as traders brace for U.S. inflation gauge
- Asian shares near two-week highs, dollar firm ahead of U.S. data
- German consumer morale improves less than expected heading into June – GfK
Upcoming Potential Catalysts on the Economic Calendar:
- MPC member Gertjan Vlieghe to give a speech at 11:00 am GMT
- U.S. preliminary GDP at 12:30 pm GMT
- U.S. initial jobless claims at 12:30 pm GMT
- U.S. core durable goods orders at 12:30 pm GMT
- U.S. pending home sales at 2:00 pm GMT
What to Watch: USD/CAD
As you can see, USD/CAD just got rejected at the 1.2140 level that lines up with a range resistance that hasn’t been broken this month as well as the 100 SMA on the 4-hour time frame.
Let’s see if today’s U.S. economic releases will encourage the bears to attack.
Over the next couple of hours, Uncle Sam will be printing a bunch of mid-tier releases including the second Q1 2021 GDP reading, initial jobless claims, pending home sales, and core durable goods orders.
Traders will be on the lookout for signs that the jump in consumer prices will indeed be “transitory” as Fed members have been telling us for months.
If we see more employment or a higher GDP revision, then it’s possible that economic activity will pick up fast enough to fill in the gaps that make raw material prices higher.
Traders could take on riskier bets like the comdolls and drag USD/CAD back down to its 1.2025 May lows.
But if the economy turns out to be more sluggish than the markets have priced in, then we could see enough safe-haven demand to push USD/CAD above the 100 SMA all the way to the 1.2175 or 1.2270 previous inflection points.
