Start your trading week right by prepping for these top-tier catalysts and checking out these potential trade setups!
Major Economic Events:
- Mar. 1, 1:45 am GMT: Chinese Caixin manufacturing PMI
- Mar. 2, 3:30 am GMT: RBA Interest Rate Decision
- Mar. 3, 1:15 pm GMT: ADP non-farm employment report
- Mar. 4, 12:30 am GMT: Australia’s trade balance
- Mar. 4, 12:30 am GMT: Japanese consumer confidence index
- Mar. 5, 1:30 pm GMT: U.S. non-farm payrolls report
- Mar. 5, 3:00 pm GMT: Canadian Ivey PMI
Forex Charts to Watch:
With major reports coming out of the U.S. and Canadian economy this week, it could be worth keeping tabs on this neat channel setup on USD/CAD.
The pair has formed lower highs and lower lows inside a descending trend channel, and price looks prime for a test of resistance soon. Technical indicators are hinting that sellers are eager to hop in and resume the downtrend.
The 100 SMA is below the 200 SMA while Stochastic is hovering around the overbought zone. Turning lower would confirm that dollar bears are back in the game and could take USD/CAD back to the channel bottom at 1.2500.
The odds of the top of the channel holding off the bears dramatically rise if broad risk sentiment remains net positive at the end of the week, and if we see above expected reads from both the U.S. (+133K net jobs add; unemployment rate to tick higher to 6.4%) and Canada (Ivey PMI to rise from 48.4 to 49.2) with their economic updates.
Here’s another potential trend play on a Loonie pair!
CAD/JPY has formed higher lows connected by a rising trend line that’s been holding since mid-December, and it looks like another dip is in the works. The widening gap between the moving averages reflect a pickup in bullish momentum while Stochastic dipping into the oversold zone hints at a takeover by buyers.
A bounce might take place around the 61.8% Fib that’s close to the trend line support and 200 SMA dynamic inflection point. But if buyers are eager to return, the 38.2% level that lines up with the 83.50 minor psychological mark and area of interest might be enough to keep losses in check!
Aside from the potentially positive catalyst from Ivey PMI, also watch out for oil prices and broad risk sentiment rising. This pair could return quickly to the upside this week if both stay positive.
Last but certainly not least is this break-and-retest setup on EUR/AUD. Don’t look now, but price is sitting right on the area of interest visible on the 4-hour time frame!
I’m talkin’ bout this former support turned resistance, descending trend line, and 200 SMA dynamic inflection point that seems to be keeping gains in check.
Stochastic is indicating exhaustion among sellers while the 100 SMA is safely below the 200 SMA to confirm that the path of least resistance is to the downside. A continuation of the drop could take EUR/AUD back to the swing low around 1.5250 while a break higher could set off a major reversal.
This is one of the ultimate recovery plays in the currency space as the Aussie reflects Australia’s ability to beat the virus while Europe recovers much slower. If that theme continues and risk sentiment continues with a positive lean, the odds are good traders will hold that trendline and the downtrend will likely continue.