The Australian dollar got a boost from the RBA Minutes and Chinese data earlier today!
But can AUD/CAD hold its gains when Canada prints CPI reports?
Before we go any further, ICYMI, yesterday’s watchlist looked at AUD/USD testing the area of interest ahead of US mid-level data. Be sure to check if it’s still playable!
And now for the main headlines that rocked the markets in the last trading sessions:
Headlines and recent economic data for the market:
RBA meeting minutes revealed that policymakers considered raising interest rates in April’s decision before agreeing to pause, citing the need to reassess tightening given inflation, jobs and spending expectations.
China’s economy grew 4.5% on a quarterly basis in the second quarter against an estimated expansion of 4.0% and a previous growth figure of 2.9%, buoyed by the easing of COVID-19 restrictions.
Fixed asset investment in China rose 5.1% year-to-date in March versus an estimated increase of 5.7% and prior growth of 5.5%, and retail sales jumped from 3.5% year-on-year to 10.5% in March versus an expected gain of 7.3%.
UK claimants increased by 28.2k in March vs. an expected 2.5k decrease in unemployment, lifting the unemployment rate from 3.7% to 3.8%.
The UK’s average earnings index rose from 5.7% to 5.9% in the three-month period to February, adding pressure to headline inflation.
Germany’s ZEW Economic Sentiment fell from 13.0 to 4.1 in March against an expected improvement to 15.5, as problems in the banking sector undermined the credit outlook.
The Eurozone ZEW Economic Sentiment fell from 10.0 to 6.4 in March, reflecting weakening optimism
Price action news
An improvement in risk appetite forced the dollar to give back some of its safe-haven gains to its forex rivals in the previous US session.
The Australian dollar was able to take better advantage of this surge in demand for higher-yielding assets, as the currency also got additional support from the Reserve Bank of Australia’s meeting minutes and mostly upbeat Chinese GDP data.
As it turns out, RBA officials actually considered raising interest rates again in April before deciding to pause to reassess the impact of the latest tightening efforts.
Canada releases CPI data at 12:30 PM GMT
The New Zealand GDT Dairy Trade Auction is coming up
Bank of Canada Governor McClim Speech at 3:00 PM GMT
Use our new profile Currency heat map To quickly see a visual overview of the forex market price movement! 🔥 🗺️
AUD/CAD 15-minute forex chart by TradingView
The Australian pair has been tearing since yesterday, making its way from the 0.950 minor psychological support level, all the way to the 0.9000 handle.
Now this major psychological resistance is in line with the R2 of the standard pivot points, which means there could be significant selling interest here.
If so, AUD/CAD could drop back to S1 (.8950) which coincides with the previous day’s lows or at least until the area of interest at the pivot point.
On the other hand, continued bullish momentum may lift the pair to R3 (.9030) or even R4 at 0.9050 minor psychological sign and previous week’s highs.
Don’t forget to take AUD/CAD average volatility 73.1 pips per day when determining entries and exits!