Looking for setups ahead of the RBA’s interest rate decision?
Check out AUD/CAD’s potential trend pullback opportunity!
Before moving on, ICYMI, I’ve listed the potential economic catalysts that you need to watch out for this week. Check them out before you place your first trades today!
And now for the headlines that rocked the markets in the last trading sessions:
Fresh Market Headlines & Economic Data:
Over the weekend, OPEC and friends announced surprised markets fresh output cut plans:
The group of oil producers will cut 1.16 million barrels per day from May until the end of the year
Saudi Arabia (500K bpd), Iraq (211K), UAE (144K), Kuwait (128K), Oman (40K), Algeria (48), and Kazakhstan (78K) have pledged daily output cuts.
The surprise notice was made as a “precautionary measure” to stabilize the oil marked and has boosted oil prices during the Asian session.
Thanks to rising costs and slower overseas growth, sentiment among Japan’s biggest manufacturers has dropped to its lowest since December 2020. Meanwhile, hopes of a rebound in tourism and services demand led to a steady(ish) index for big services providers.
China’s Caixin manufacturing PMI dipped from an eight-month high of 51.6 to 50.0 in March over weaker external demand.
Australia’s building permits grew by 4.0% m/m in February after a 27.1% slump in January as approvals for private sector houses improved by 11.3%.
Australia’s retail activity saw another 0.2% m/m growth in February, supporting a steadier growth after post-economic reopening spikes in the last three months.
Price Action News
OPEC and its friends’ decision to surprise markets with a fresh round of intended output cuts dominated the Asian and early European session trading.
The safe-haven yen, in particular, gained points after a gap lower as traders also digested weaker-than-expected factory activity in China.
The yen soon made new intraday lows, however, since traders turned to pricing in central banks around the world needing to raise interest rates further to combat the impact of higher oil prices… and realizing that any tightening would not come from the uber dovish Bank of Japan (BOJ).
Upcoming Potential Catalysts on the Forex Economic Calendar:
Canada’s manufacturing PMI at 1:30 pm GMT
U.S. ISM manufacturing PMI at 2:00 pm GMT
BOC business outlook survey at 2:30 pm GMT
NZIER business confidence at 10:00 pm GMT
RBA’s policy decision at 4:30 am GMT (Apr 4)
Use our new Currency Heat Map to quickly see a visual overview of the forex market’s price action! 🔥 🗺️
AUD/CAD: 15-minute
OPEC+’s surprise oil output cuts caused AUD/CAD to gap lower at the start of the week.
China’s disappointing PMI reports then dragged the China-sensitive AUD lower before it found support at the halfway mark of AUD/CAD’s full daily ATR.
And now traders are starting to price in in interest rate hikes from major central banks including the Reserve Bank of Australia (RBA) which is initially expected to pause its rate hike cycle this week.
Thanks to hawkish RBA expectations, AUD/CAD is now trading above its daily open price and closer to a broken support from late last week.
As you can see, the inflection point also represents the 50% Fibonacci retracement of Friday’s downswing and the Pivot Point level on the 15-minute time frame.
Will AUD/CAD extend its downtrend? If the RBA pauses its rate hikes despite fresh threats of higher inflation and banking concerns, then AUD/CAD could dip back to its Monday lows or make new intraweek lows.
But if the RBA raises its rates when many had priced in a pause, then AUD/CAD could see additional demand that could push it to the .9100 previous area of interest.
