Got a classic technical pattern on AUD/CAD to checkout ahead of top tier catalysts from both Canada & Australia into the weekend.
Intermarket Snapshot
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Fresh Market Headlines & Economic Data:
- China says it’s willing to resolve the trade war with a ‘calm attitude,’ hints it won’t retaliate for now
- U.S. weekly jobless claims increase slightly
- U.S. second-quarter GDP growth revised to 2.0%
- The U.S. Advance International Trade in Goods deficit decreased in July 2019 to $72.3B from $74.2B in June
- The average wage for Canadian Non-farm payroll employees was down 0.5% in June from the previous month, & up 2.5% on a year-over-year basis.
- Canada’s current account deficit (on a seasonally adjusted basis) narrowed by $10.2 billion to $6.4 billion in the second quarter
- Brent oil holds above $60 as lower inventories boost WTI
- EU ministers warn against no-deal Brexit
- UK opposition Labour Party tells PM Johnson: ‘Bring it on’
- U.K.’s McDonnell: ‘Increasingly Confident’ of Majority to Stop No-Deal
- Boris Johnson’s suspension of Parliament over Brexit sparks outrage
- German inflation eases again unexpectedly
- French economy shrugs off euro zone slowdown in second quarter
- Australia private capital expenditure falls -0.5% (seasonally adjusted) in the June quarter
- ANZ Business Outlook Survey says there’s ‘nothing good to say’ about New Zealand business confidence as it hits the lowest level in over 11 years
- BOJ policymaker sees danger from more easing, in signal of wider board rift
Upcoming Potential Catalysts on the Forex Calendar:
- GfK Consumer confidence at 12:01 am GMT (Aug. 30)
- Japan core CPI & unemployment rate at 12:30 am GMT (Aug. 30)
- Japan industrial production & retail sales at 12:50 am GMT (Aug. 30)
- Australia Building approvals & private sector credit at 2:30 am GMT (Aug. 30)
- Japan Housing starts at 6:00 am GMT (Aug. 30)
- German retail sales at 7:00 am GMT (Aug. 30)
- U.K. nationwide house prices at 7:00 am GMT (Aug. 30)
- Swiss KOF economic barometer at 8:00 am GMT (Aug. 30)
- U.K. money supply & mortgage approvals at 9:30 am GMT (Aug. 30)
- Euro area CPI & unemployment rate at 10:00 am GMT (Aug. 30)
- Canadian GDP & producer prices at 1:30 pm GMT (Aug. 30)
- U.S. personal spending & income, core PCE index at 1:30 pm GMT (Aug. 30)
What to Watch: AUD/CAD
With the weekend around the corner, we’ll be looking to take one last shot at the FX markets with this simple technical setup on AUD/CAD. The pair has been consolidating into a symmetrical triangle pattern this whole week with traders seemingly attracted to the .8950 level.
This is a pattern that typical calls for a consolidation-breakout play, which of course means we need a pick up in volatility. That may come in the Friday session with some top tier economic events from both Australia and Canada on the forex calendar.
If you’re a bull, you’ll obviously be looking for the combination of a positive read on Australian building permits & private sector credit vs. a weak Canadian GDP update. Another positive update on the U.S.-China trade war story would likely spark Aussie bullishness, which could likely be the driving factor more than the economic updates. In this situation a break of the falling highs is the cue to setup a long position, but with the weekend ahead, you’ll want to keep your exit strategy tight, unless you’re planning to turn this into a swing/longer-term position.
If you’ve a bear on AUD/CAD, you’re basically looking for the opposite scenario than above for the bulls, with addition of strengthening oil prices. A rallying oil market plus positive Canadian GDP would likely be a big boost for the Loonie and overshadow Australian data, but not likely any positive U.S.-China trade war. Again, keep the exit strategy tight unless you’re really confident in the medium-to-longer-term outlook.
