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AUD/CAD – Technical Analysis for Forex Trading & CFDs.
Canada – Raw Materials Price Index
On Thursday, at GMT 2:30 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 traders 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 came decreased by -1.5% and the forecast for this month is currently set at an increase of 3.3%.
Australian – Trade Balance
On Friday, at GMT 1:30 a.m., the Australian Bureau of Statistics will release the monthly Trade Balance figure, which measures the difference in value between all import and export, including physical goods and intangible services.
Since the demand for export is directly correlated with the demand for the Australian Dollar, Forex investors analyse the monthly trade balance in order to gauge the strength of the AUD against other major currencies.
Last month, the Australian trade balance figure came out at -1.54 billion and the forecast for this month is currently set a slightly better, but still negative, figure compared to last month, at -0.55 billion.
Trade Recommendation for the AUD/CAD
Since breaking below the uptrend line on November 16, 2016, the AUD/CAD went down by around 350 pips over the last two months and finally found support around the 0.9675 level. However, last Friday, the AUD/CAD price penetrated below the 0.9675 level and currently trading below this important pivot zone.
As the Canadian RMPI is expected to go up by 3.3% this week, we believe the fundamental outlook for the AUD/CAD would remain bearish and there is a good chance that the AUD/CAD price will fall towards the major support around the 0.9630 level.
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 brokers at the market price, as long as it is trading below the 0.9675 level. A possible profit target for this trade would be around the 0.9630 level. On the other hand, Forex traders should consider placing a stop loss order above 0.9705.
Asif worked as a prop trader for almost a decade, and later he managed trading operations for one of the largest foreign exchange strategy developers in Europe. Currently, he works as a trading consultant to several brokers and writes about various tech and financial topics. You can reach him at contact@asifimtiaz.com
Asif Imtiaz
