I’m capping the week off with this simple range play on AUD/CAD!
Do you think the floor will hold during Canada’s retail sales release?
Before moving on, ICYMI, yesterday’s watchlist checked out EUR/USD’s long-term downtrend ahead of U.S. 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:
U.K. Prime Minister Liz Truss announces resignation
U.S. Philly Fed manufacturing index up from -9.9 to -8.7 vs. -5.5 forecast
U.S. existing home sales slump from 4.78M to 4.71M
U.S. CB leading index down by 0.4% vs. projected 0.3% dip
Snapchat share prices tumbled 26% on slowing revenue
Fed official Harker: Central bank to keep raising rates for a while
New Zealand trade deficit narrowed from 2.62B NZD to 1.61B NZD
Japanese national core CPI up from 2.8% to 3.0% as expected
U.K. GfK consumer confidence index improved from -49 to -47 vs. -52 forecast
New Zealand credit card spending up from 29.3% to 34.1% y/y
U.K. retail sales tumbled by 1.4% in September, following earlier 1.7% slide
U.K. public sector net borrowing jumped from 8.6B GBP to 19.2B GBP
Germany drops opposition to EU natural gas price gap
BOJ increases amounts at regular bond-buying operation
Canadian retail sales at 12:30 pm GMT
FOMC member Williams to speak at 1:10 pm GMT
Eurozone consumer confidence index at 2:00 pm GMT
Use our new Currency Heat Map to quickly see a visual overview of the forex market’s price action! 🔥 🗺️
What to Watch: AUD/CAD
AUD/CAD 1-hour Forex Chart
Check out the sideways chart action on AUD/CAD!
This pair has been bouncing off support at the .8600 handle and resistance near the .8700 mark for the past few weeks.
Another test of the floor seems to be shaping up, but will it hold again?
It could all boil down to the outcome of the Canadian retail sales report today, as a strong rebound in consumer spending might be enough to send the Loonie rallying.
Analysts are expecting headline retail sales to recover by 0.2% after the earlier 2.5% slump. The core version of the report might post a 0.3% gain, following the previous 3.1% slide.
Don’t forget that Canada’s latest CPI readings turned out mostly stronger than expected, giving the BOC more leeway to keep hiking interest rates.
If that’s the case, EUR/CAD could tumble below the range support and go for a drop that’s the same height as the rectangle or around 100 pips.
Technical indicators are giving mixed signals at the moment, although there are some hints of weakening bearish pressure.
The 100 SMA is below the 200 SMA, but the gap between the moving averages has narrowed enough to suggest a potential bullish crossover. Stochastic has also reached the oversold area and might be due to turn higher soon.
In any case, better practice proper risk management and check out the average AUD/CAD volatility when trading the news!