The U.S. is about to print a few closely watched economic reports!
Will the releases make or break USD/CAD’s uptrend this week?
Before moving on, ICYMI, yesterday’s watchlist looked at AUD/CHF’s downtrend ahead of the RBA’s decision. Be sure to check out if it’s still a good play!
And now for the headlines that rocked the markets in the last trading sessions:
Fresh Market Headlines & Economic Data:
Fed’s bank lending survey showed U.S. banks reporting tighter credit, weaker loan demand in Q2 2023
Chicago PMI edged up from 41.5 to 42.8 (vs. 43.0 expected) in July
New Zealand home-building consents dip by 2.6% q/q in Q2, down to their lowest levels since Q3 2020 as higher interest rates and a property slump slow construction
BRC: Prices in UK stores fell for the first time in two years, down by 0.1% in July compared to June.
Japan’s unemployment rate edged lower from 2.6% to 2.5% in June, the lowest since January
Volatile Australian building approvals fell by 7.7% m/m in June after 20.5% jump in May
China Caixin manufacturing PMI slips into contraction, down from 50.5 to 49.2 in July, as both supply and demand weakened
RBA kept its rates unchanged at 4.10% (vs. 4.35% expected) in August
In its statement, RBA shared that “Some further tightening of monetary policy may be required” but will “depend upon the data.”
Nationwide: U.K. house prices dropped by 3.8% y/y in July, the largest decline since 2009
Spain’s HCOB manufacturing PMI fell from 48.0 to 47.8 in July, the lowest since December
Italy’s HCOB manufacturing PMI up from 43.8 to 44.5 (vs. 44.4 expected) in July
France’s HCOB manufacturing PMI fell from 46.0 to 45.1 in July, the lowst since May 2020.
U.K. S&P Global/CIPS manufacturing PMI fell to 45.3 in July, its lowest reading since May 2020, as contraction in outpupt, new orders, and employment accelerated
German unemployment rate unexpectedly fell from 5.7% to 5.6% in July, with the number of people out of work decreasing by a net of 4,000 despite the companies’ demand for labour remaining “strained.”
Price Action News
One of the biggest movers in the Asian session is the RBA’s decision, where the central bank members decided to keep their interest rates steady at 4.10% in August.
The decision surprised some AUD traders who had priced in a rate cut from Governor Lowe and his team.
Not surprisingly, AUD dropped across the board and made new lows against its major counterparts during the Asian and early European trading.
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
U.S. JOLTS job openings at 2:00 pm GMT
New Zealand quarterly employment data at 10:45 pm GMT
BOJ’s meeting minutes at 11:50 pm GMT
Use our new Currency Heat Map to quickly see a visual overview of the forex market’s price action! 🔥 🗺️
USD/CAD: 1-hour
I don’t know if you’ve been watching comdoll pairs lately, but USD/CAD has been making higher highs and higher lows since mid-July.
What makes the pair interesting today is that it’s testing the upper limits of an ascending channel before the U.S. publishes closely watched reports such as the ISM manufacturing PMI and JOLTS job openings.
If today’s U.S. reports support speculations that the Fed is done raising its interest rates for the time being, then USD/CAD could find resistance from the channel support that’s also near last week’s highs.
The 1.3220 Pivot Point and mid-channel level are the closest major inflection points though the pair could drop to the 1.3200 levels closer to the 100 and 200 SMAs.
If today’s market themes encourage more risk aversion and/or USD-buying, however, then USD/CAD could bust above its ascending channel.
USD/CAD could even hit the R1 (1.3290) of today’s Pivot Points or the 1.3300 before the pair sees legit selling pressure!
Watch this one closely and stick around during the U.S. releases so you won’t miss out on any USD/CAD trading opportunities!
