Looks like a lot of major currencies are pulling back from their extreme levels!
Can AUD/CAD retrace enough for traders to consider a break-and-retest trade?
Before moving on, ICYMI, yesterday’s watchlist looked at GBP/USD for pullback opportunities. 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:
EU aims to cut dependence on Russian gas by almost 80 percent this year
Russia warns West of $300 per barrel oil, cuts to EU gas supply
Japan’s wages up by 0.9% in Jan, the first growth in five months
UK BRC retail sales increase by 2.7% y/y in Feb thanks to furniture and home accessories demand
Australia NAB business conditions (up 7 points to +9) and confidence (up 8 points to +13) improve in February
Japan’s coincident indicator index fell 0.5% in Jan over the Omicron variant
Germany industrial production unexpectedly accelerates from 1.1% to 2.7% in Jan
Oil firms, Asia shares drop as Ukraine talks make little progress
Most Asian markets falter as commodity prices fuel inflation worries
Upcoming Potential Catalysts on the Forex Economic Calendar:
U.S. trade balance at 1:30 pm GMT
Canada’s trade balance at 1:30 pm GMT
NZ quarterly manufacturing sales at 9:45 pm GMT
RBA Gov. Lowe to give a speech in Sydney at 10:15 pm GMT
Japan’s final GDP at 11:50 pm GMT
China’s CPI reports at 1:30 am GMT (Mar. 9)
Use our new Currency Heat Map to quickly see a visual overview of the forex market’s price action! 🔥 🗺️
What to Watch: AUD/CAD
There were a few data releases during the Asian session but focus was still very much on crude oil prices.
Specifically, the newswires were dominated by headlines that the European Union (EU) will reduce its Russian gas imports. In return, Russia has threatened to cut gas supplies and floated the idea of a $300 per barrel oil. *Shudders*
Crude oil prices hit $130 before steadying at around $120.
Oil prices firming at the $120 zone and whispers about crude oil hitting $300 is probably why AUD/CAD traded much lower today. Of course, it didn’t help that some AUD bulls who had priced in a rate hike in February had taken profits when AUD/CAD hit the .9450 levels.
All the CAD-buying and AUD-selling could drag AUD/CAD to the .9250 area that lines up with the 38.2% Fibonacci retracement of February’s upswing. And why not? As you can see, .9250 is also near a broken trend line resistance and the 200 SMA on the daily time frame.
Stochastic is still telling us that AUD/CAD remains overbought, so AUD bears can take advantage of today’s Canadian trade balance release to catch some of the bearish momentum before AUD/CAD finds a support zone.
If you’d rather wait for a chance to buy AUD, then you’ll want to pay close attention to the .9250 area that we’ve marked or look at other areas of interest like .9300 and .9350 for entry opportunities.
