With not a lot going on data-wise, I got my eyes set on AUD/CAD testing a key support level.
Think the Aussie can bounce against the Loonie in the next trading sessions?
Before moving on, ICYMI, today’s Asia-London session watchlist checked out EUR/AUD’s break-and-retest uptrend ahead of Australia’s labor market data releases. 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:
Japan PPI surged to 8% yoy in Oct, highest since 1981
New Zealand food prices fall for 1st time since February
UK house prices soar again in Oct, fuelled by dearth of sellers: RICS
Australia’s unemployment rate unexpectedly rises from 4.6% to 5.2% in October as economy sheds 46,000 jobs
UK growth slows to 1.3% in the 3rd quarter as supply chain disruptions and inflation hit
UK manufacturing production rises by 0.1% MoM in September vs. 0.2% expected
Indian stocks lead losses in Asia as inflation worries weigh
Upcoming Potential Catalysts on the Forex Economic Calendar:
U.S. and Canada’s markets on bank holidays today
ECB’s economic bulletin at 9:00 am GMT
EU’s economic forecasts at 10:00 am GMT
If you’re not familiar with the forex market’s main trading sessions, check out our Forex Market Hours tool.
What to Watch: AUD/CAD
The U.S. and Canada are both on banking holidays today so we won’t see a lot of data releases that may move the major currencies around.That doesn’t mean we won’t see tradeable setups though! Today I’m looking at AUD/CAD, which has reached a key support level on the 4-hour time frame.
The pair is registering long wicks around its current levels, which is a stone’s throw away from a range support that hasn’t been broken since late July.
A bounce from the area could lead to a retest of the .9250 mid-range levels or even the .9300 range resistance zones.
But does the Aussie have fundamental legs to support a rally? Data printed earlier showed Australia’s unemployment rate unexpectedly jumping as laborers jumped back in the market even as lockdowns persisted.
If traders focus on bargain hunting after the initial AUD selloff, or if they pay closer attention to the U.S. limiting crude oil price increases by releasing some of its strategic reserves, then AUD/CAD may bounce from its range support.
But if traders price in a less hawkish bias for the Reserve Bank of Australia (RBA) or a jump in oil prices, then AUD/CAD may finally break below its months-long range and test areas of interest near .8900 or .9000.