AUDCAD MOVES WITHIN CHANNEL
On Monday, January 27, reports showed China’s manufacturing activity contracted for the first time in four months, with the PMI dropping to 49.1 from 50.1 in December. The decline was attributed to the Lunar New Year holidays, as factory production slowed due to worker absences.
Given China's role as Australia's largest trading partner, particularly for commodities like iron ore and coal, reduced industrial demand impacts Australia's economy. Consequently, the Aussie weakened, causing AUDCAD to decline by around 0.40% following the data release.
UPCOMING CATALYST
On Wednesday, Australia's inflation data is set for release, with a projected quarter-over-quarter increase of 0.1% from 0.2% to 0.3%, and a year-over-year rise of 0.2%. However, the trimmed mean CPI is anticipated to dip to 0.6% from the previous 0.8%. This data will likely influence market sentiment around the Reserve Bank of Australia's policy stance.
Later in the day, attention will shift to the Bank of Canada (BoC), which is expected to cut its benchmark interest rate from 3.25% to 3.00%. The decision will be accompanied by a press statement that could offer insights into the central bank's future monetary policy direction.
TECHNICAL VIEW
On the 4-hour timeframe, price continues to trade within a channel, with the black trendline acting as resistance and the green lower band as support. The psychological 0.9000 level currently serves as minor support, awaiting a market catalyst for direction.
In view of these data point’s if we see a positive reading on AUD, buyers may target 0.9048, 0.9081, and 0.9130. Conversely, weaker or mixed data could see sellers pushing prices toward 0.8972, 0.8912, and 0.8879. Breakouts beyond these levels are also possible. Meanwhile BoC rate decision is expected to drive prices later in the day.
Given China's role as Australia's largest trading partner, particularly for commodities like iron ore and coal, reduced industrial demand impacts Australia's economy. Consequently, the Aussie weakened, causing AUDCAD to decline by around 0.40% following the data release.
UPCOMING CATALYST
On Wednesday, Australia's inflation data is set for release, with a projected quarter-over-quarter increase of 0.1% from 0.2% to 0.3%, and a year-over-year rise of 0.2%. However, the trimmed mean CPI is anticipated to dip to 0.6% from the previous 0.8%. This data will likely influence market sentiment around the Reserve Bank of Australia's policy stance.
Later in the day, attention will shift to the Bank of Canada (BoC), which is expected to cut its benchmark interest rate from 3.25% to 3.00%. The decision will be accompanied by a press statement that could offer insights into the central bank's future monetary policy direction.
TECHNICAL VIEW
On the 4-hour timeframe, price continues to trade within a channel, with the black trendline acting as resistance and the green lower band as support. The psychological 0.9000 level currently serves as minor support, awaiting a market catalyst for direction.
In view of these data point’s if we see a positive reading on AUD, buyers may target 0.9048, 0.9081, and 0.9130. Conversely, weaker or mixed data could see sellers pushing prices toward 0.8972, 0.8912, and 0.8879. Breakouts beyond these levels are also possible. Meanwhile BoC rate decision is expected to drive prices later in the day.
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