The Aussie got a bit of a boost from the RBA minutes and Chinese data earlier today!
But can AUD/CAD hold on to its gains when Canada prints its CPI reports?
Before moving on, ICYMI, yesterday’s watchlist looked at AUD/USD testing an area of interest ahead of mid-tier U.S. data. 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:
RBA minutes revealed that policymakers considered hiking rates in April decision before agreeing to pause, citing need to reassess tightening given inflation, jobs, and spending outlook
Chinese economy grew by 4.5% quarter-over-year in Q2 vs. estimated 4.0% expansion and previous 2.9% growth figure, buoyed by easing of COVID-19 restrictions
China’s fixed asset investment rose by 5.1% year-to-date in March vs. estimated 5.7% increase and previous 5.5% growth, retail sales jumped from 3.5% year-over-year to 10.5% in March vs. expected 7.3% gain
U.K. claimant count increased by 28.2K in March vs. projected 2.5K drop in joblessness, bringing unemployment rate up from 3.7% to 3.8%
U.K. average earnings index rose from 5.7% to 5.9% in three-month period ending in February, putting upside pressure on overall inflation
German ZEW economic sentiment index slipped from 13.0 to 4.1 in March vs. estimated improvement to 15.5, as banking sector woes dampened credit outlook
Eurozone ZEW economic sentiment index fell from 10.0 to 6.4 in March to reflect weaker optimism
Price Action News
Overlay of AUD Pairs 15-min
Improved risk appetite forced the dollar to return some of its safe-haven winnings to its forex rivals in the previous U.S. session.
The Aussie managed to take better advantage of this pickup in demand for higher-yielding assets, as the currency also got an additional boost from the RBA minutes and mostly upbeat Chinese GDP data.
As it turns out, RBA officials actually considered another rate hike in April before deciding to pause in order to reassess the impact of their recent tightening efforts.
Canada’s CPI reports at 12:30 pm GMT
New Zealand GDT dairy trade auction coming up
BOC Governor Macklem’s speech at 3:00 pm GMT
Use our new Currency Heat Map to quickly see a visual overview of the forex market’s price action! 🔥 🗺️
AUD/CAD 15-min Forex Chart by TradingView
This Aussie pair has been on a tear since yesterday, making its way from the .8950 minor psychological support all the way up to the .9000 handle.
Now this major psychological resistance happens to line up with the R2 of the Standard Pivot Points, which means that there might be significant selling interest right here.
If so, AUD/CAD could slump back to S1 (.8950) which coincides with the previous day lows or at least until the area of interest at the pivot point.
Sustained upside momentum, on the other hand, could take the pair up to R3 (.9030) or even R4 at the .9050 minor psychological mark and previous week highs.
Don’t forget to take the average AUD/CAD volatility of 73.1 pips per day when setting entries and exits!
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