- 1 AUD/CAD – Technical Analysis for Forex Trading .
AUD/CAD – Technical Analysis for Forex Trading .
Canada – Raw Materials Price Index
On Thursday, at GMT 1:30 p.m., the Statistics Canada will release the month-over-month Raw Materials Price Index (RMPI), which measures the changes in the price of raw materials bought by manufacturers in the country over the past month.
Forex investors consider the RMPI to be an important leading indicator of consumer inflation in Canada, because if manufacturers pay more to buy raw materials, then ultimately the retail customers end up paying for the higher cost of production.
Last month, the Canadian RMPI increased by 1.7%, after increasing 6.5% in the previous month. If the trend continues, it would likely to have a bullish effect on the Canadian dollar.
Australia – Private Sector Credit
On Friday, at GMT 1:30 a.m., the Reserve Bank of Australia will release the month-over-month Private Sector Credit data, which measures the changes in the total value of new credit issued to consumers and corporations in the country over the previous month.
Forex traders consider the private sector credit to be an important fundamental indicator of the Australian economy as borrowing and spending are highly correlated. Consumers and businesses only take out credit when they feel confident about their ability to pay it back in the future. Hence, it also acts as a measure of consumer and business confidence.
Last month, the private sector credit in Australia increased by 0.2% and the forecast for this month is currently set 0.5%.
Trade Recommendation for the AUD/CAD
Since January 6, 2017, the AUD/CAD has remained in a strong uptrend and formed a well-respected uptrend line in the process. However, last week, the AUD/CAD broke below the uptrend line and found support around the 23.6% Fibonacci retracement of the previous upward swing.
As the Canadian RMPI has been improving over the last two months, we believe that if the trend continues, it would likely set a bearish fundamental outlook for the AUD/CAD. Hence, if the AUD/CAD price penetrates and closes below last week’s low, which is at 1.0157, it would likely attract additional bearish momentum in the market.
Under the circumstances, it would be recommended that Forex traders consider placing a SELL order at market price for the AUD/CAD with their Forex trading brokers, as soon as it is trading below the 1.0157 level. A possible profit target for this trade would be around the 1.0110 level. On the other hand, Forex traders should consider placing a stop loss order above 1.0180.
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