AUD/CAD in focus ahead of Aussie retail sales, Canadian jobs
Fawad Razaqzada November 2, 2017 2:20 PM
For obvious reasons, Friday’s main focus will be on the US nonfarm payrolls report. As a result, jobs data from the other North American nation, which will be released at the same time, will be overshadowed. But this need not be the case, as the Canadian dollar could possibly present better trading opportunities than the US dollar. That being said, if the Canadian dollar is going to move sharply, we will the nation’s jobs report to show significant deviation from the +15,300 expectations for the headline figure. With the Bank of Canada recently putting its hawkish stance on a hold again, the downbeat CAD does really need a big jobs number otherwise we could see further declines.
Given the simultaneous release of jobs data from both North American nations tomorrow, it is very difficult to prepare for a trade setup on the USD/CAD. Instead, speculators may wish to pair the Canadian dollar against another currency to maximise the impact of the Canadian data release. With Australia releasing its own retail sales overnight, the AUD/CAD could be either overbought or oversold by the time the Canadian data is published. Thus, speculators may even be able to fade that potential move ahead of the Canadian data release, as an alternative entry method to a breakout strategy. Australian retail sales are meanwhile expected to have bounced back 0.4% month-over-month in September following a decline of 0.6% the month before.
From a technical point of view, while the break of the bearish trend line on the AUD/CAD is clearly bullish, the fact that price remains below the 200-day average can be considered bearish. But the 200-day average is flat and is not pointing to any particular direction. This is a typical characteristic of side-ways markets. Indeed, the AUD/CAD is stuck in a wide range, making it an ideal candidate to trade from one level to the next, especially around news events. With that in mind, the first level of support level is at 0.9870, which had been resistance in recent trade. The next level down is at 0.9820, which needs to hold otherwise a drop towards the key 0.9700 handle would most likely be the outcome. Meanwhile on the upside, the next level of resistance comes in around the 0.9950 area, followed by parity, where the 200-day average is also residing.
Source: eSignal and FOREX.com.
Disclaimer: The information on this web site is not targeted at the general public of any particular country. It is not intended for distribution to residents in any country where such distribution or use would contravene any local law or regulatory requirement. The information and opinions in this report are for general information use only and are not intended as an offer or solicitation with respect to the purchase or sale of any currency or CFD contract. All opinions and information contained in this report are subject to change without notice. This report has been prepared without regard to the specific investment objectives, financial situation and needs of any particular recipient. Any references to historical price movements or levels is informational based on our analysis and we do not represent or warranty that any such movements or levels are likely to reoccur in the future. While the information contained herein was obtained from sources believed to be reliable, author does not guarantee its accuracy or completeness, nor does author assume any liability for any direct, indirect or consequential loss that may result from the reliance by any person upon any such information or opinions.
Futures, Options on Futures, Foreign Exchange and other leveraged products involves significant risk of loss and is not suitable for all investors. Losses can exceed your deposits. Increasing leverage increases risk. Spot Gold and Silver contracts are not subject to regulation under the U.S. Commodity Exchange Act. Contracts for Difference (CFDs) are not available for US residents. Before deciding to trade forex and commodity futures, you should carefully consider your financial objectives, level of experience and risk appetite. Any opinions, news, research, analyses, prices or other information contained herein is intended as general information about the subject matter covered and is provided with the understanding that we do not provide any investment, legal, or tax advice. You should consult with appropriate counsel or other advisors on all investment, legal, or tax matters. References to Forex.com or GAIN Capital refer to GAIN Capital Holdings Inc. and its subsidiaries. Please read Characteristics and Risks of Standardized Options.