AUD/CAD – Technical Analysis for Australian Forex Trading
Australia – Building Approvals
Today, at GMT 2:30 a.m., the Australian Bureau of Statistics released the national month-over-month building approvals figure, which measures the changes in the number of approvals of new buildings.
Since a build permit indicates new construction work, it suggests that there would be additional positive economic activities. For example, new jobs would be created for construction workers. Therefore, Australian forex trading investors consider this data regarding new building approvals to be a leading indicator of the overall economic health of the country.
Last month, the building approvals figure went up by 8.9% and the forecast for this month was set at a decrease of -3.9%. However, the actual figure came out much worse than what the market was expecting, at -13.4%.
Canada – Building Permits
On Tuesday, at GMT 1:30 p.m., Statistics Canada will publish the monthly Building Permits figure that measures the changes in the total number of new permits issued for constructing new premises in the country.
Since permits are mandatory to start building construction, the number of new permits acts as a leading indicator of the future construction activity in the country. Also, Forex traders consider that new constructions help energize the economy, as new buildings require materials from many other industries.
Last month, the amount of new Building Permits declined by as much as -2.5% and this month the forecast is set on growth of 4.2%.
Since forming a bullish pin bar on April 12, 2017, the AUD/CAD remained bullish and climbed up by around 330 pips over the last one month. However, last week, on May 3, the AUD/CAD formed a large bearish bar, which has prompted the market to started a minor retracement. As a result, the AUD/CAD seems to be approaching the 38.2% Fibonacci retracement level of the last major upward swing, which is located near the 1.0070 level.
As the Canadian building permits figure is expected to increase by 4.2%, but the Australian building approvals figure declined by -13.4%, we believe the fundamental outlook for the AUD/CAD would likely remain bearish this week as well. Under the circumstances, if the AUD/CAD penetrates and closes below the support level around 1.0070, it would likely attract additional bearish momentum in the market.
Hence, Australian Forex traders should look out for trading opportunities below this major support level around 1.0070 level.
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