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For today’s forex watchlist, we’re pairing up this simple support break on AUD/CAD with recent big time Aussie and Loonie catalysts, and central bank speeches coming soon.

Intermarket Snapshot

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Fresh Market Headlines & Economic data:

Upcoming Potential Catalysts on the Forex Calendar:

  • BOC Poloz speech to Chamber of Commerce of  Metropolitan Montreal at 6:00 pm GMT
  • RBA Lowe testifies to House of Representatives’ Standing Committee on Economics at 10:30 pm GMT

What to Watch: AUD/CAD

AUD/CAD 1-Hour Forex Chart
AUD/CAD 1-Hour Forex Chart

This is about as straight forward as it gets. Looking at the one hour chart above of AUD/CAD, we see a minor support area being broken with very strong momentum thanks to bearish Aussie news (China port bans Australian coal; Westpac sees two rate cuts this year) during the Asia and morning London session. The Loonie got a slight boost as well after positive reads on ADP employment and wholesales data, so the bears may be here to stay on AUD/CAD for the rest of the session.

But as shown up above, we’ve got upcoming speeches from both heads of the Bank on Canada and the Reserve Bank of Australia, so depending on what they say, that bearish sentiment could increase, flip, or do nothing at all.  Odds are for volatility to pick up as today’s data may give both central bankers fuel to deliver unexpected rhetoric on their monetary policy outlook, especially RBA Lowe’s upcoming testimony.

For the bears, shorting here is valid argument given today’s events, but that .9300 was a strong area of interest in the past so additional down moves may be limited.  If it does break though, the next support area is not seen until .9200, which is very attractive given the catalysts and volatility increase.

For the bulls, you may want to wait until RBA Lowe testifies later. Given the impressively strong Australian jobs data just released, he may not be so dovish in his rhetoric, which is likely the expectation given the falling housing market in Australia and subdued inflation conditions.