AUD/CAD is making its way back up the charts!
Think we’re about to see another period of higher lows and higher highs from the pair?
Before moving on, ICYMI, yesterday’s watchlist checked out EUR/JPY’s ascending triangle resistance after the European PMI releases and ahead of Japan’s CPI report. Be sure to check out if it’s still a good play!
And now for the headlines that rocked the markets in the last trading sessions:
Fresh Market Headlines & Economic Data:
New Zealand’s retail sales unchanged in Q3 2023 (-0.8% forecast, -0.9% previous) and marked the first quarter to not show contraction; Per capita spending dipped to 4,811 NZD per person, the lowest since mid-2020
Japan’s core CPI picked up from 2.8% y/y to 2.9% y/y in October (vs 3.0% y/y forecast) and supported speculations of the BOJ ending its negative interest rates era
GfK: U.K.’s consumer confidence jumped from -30 to -24 in November despite lingering cost-of-living concerns
au Jibun Japanese manufacturing PMI dropped from 48.7 to 48.1 in November and marked the sharpest deterioration in manufacturing conditions since February
Germany’s GDP confirmed at -0.1% q/q in Q3 2023 after a 0.1% uptick in Q2; Annual GDP adjusted at -0.4% y/y in Q3
German Ifo business climate for November: 87.3 (87.5 forecast, 86.9 previous)
Price Action News
A shortened trading week in the U.S. and a lack of market-moving news in the Asian and early European session trading kept volatility tight among the major currencies.
GBP did get some attention at the beginning of the London session. The British pound shot up across the board!
Whether it’s due to traders catching up to the currency’s strength from the previous session or it’s traders pricing in a surprisingly optimistic U.K. consumer survey, GBP is in the green against its major counterparts.
GBP is seeing the most gains against JPY, CHF, and EUR and is up the least against NZD, AUD, and CAD.
Upcoming Potential Catalysts on the Economic Calendar:
ECB President Lagarde to give a speech at 10:00 am GMTCanada’s retail sales at 1:30 pm GMTU.S. manufacturing and services PMIs at 2:45 pm GMT
Use our new Currency Heat Map to quickly see a visual overview of the forex market’s price action! 🔥 🗺️
A few days ago, we looked at AUD/CAD possibly starting a new (bearish) trend after breaking below a trend line support.
The pair ended up spiking all the way to .9000 before making new post-breakout lows!
Since then AUD/CAD has been making higher highs and higher lows and the 15-minute chart’s 100 and 200 SMAs have seen a bullish crossover.
And why not? Oil prices continue to trade below their weekly open prices. Meanwhile, Reserve Bank of Australia (RBA) Governor Bullock AND the RBA’s latest meeting minutes confirmed the central bank’s hawkish biases.
Let’s see if today’s Canadian retail sales report can make or break AUD/CAD’s trend. Traders see Canada printing weaker retail numbers in September compared to August.
If traders lean towards selling CAD against AUD, then AUD/CAD’s current levels – which are near the SMAs and a mid-channel line – may attract sellers into extending AUD/CAD’s uptrend.
Fresh bullish momentum could mean that a move to the R1 (0.9000) Pivot Point line or the .9012 previous highs may be in the cards.
Don’t discount sentiment changes, though, especially when some of our U.S.-based friends come back for a bit or if the U.S. PMI releases change the overall risk environment.
If you see AUD/CAD trading consistently below its ascending channel pattern or today’s Pivot Point line, then you should pivot to a trading plan that reflects new market conditions!