Aud/Cad Trading Idea: Tokyo-London Session

Aud/Cad Trading Idea: Tokyo-London Session

Aud/Cad Trading Idea! Just a few days after our previous analysis, the pair played out as speculated. Could this be an additional trading opportunity to scale into our trade or sit back and watch the market? Continue reading to explore this trading opportunity.

Economic events on Aud

Unemployment Rate:

The unemployment rate is used to measure the percentage of the total workforce that is unemployed and the ones actively seeking employment during the previous month, Although it is generally viewed as a lagging indicator.

The number of unemployed people is an important signal of overall economic health because consumer spending is highly correlated with labor-market situations, this data is released monthly, about 15 days after the month ends.

If however, the Actual data released is lesser than the Forecast, it is considered good for the preceding currency.

CurrencyForecastPrevious
AUD3.9%4.0%
High Economic Impact

Economic events on Cad

Overnight Rate:

This measures the interest rate at which major financial institutions borrow and lend overnight funds between themselves, The rate decision is usually priced into the market, so it tends to be influenced by the Bank of Canada(BOC) Rate Statement, which focuses on the future.

Short-term interest rates are the paramount factor in currency valuation – Investors/traders look mostly at other indicators merely to predict how interest rates are likely to change in the nearest future.

This data is scheduled 8 times per year, however, if the ‘Actual’ data released is greater than ‘Forecast’, it is considered good for the currency.

CurrencyForecastPrevious
CAD1.00%0.50%
High Economic Impact

Highlight

Aud/Cad pair as speculated from our previous analysis retested the broken resistance of the Descending broadening wedge pattern where it bounced off, thus making a new high testing 0.95000 price level which resulted in a minor pullback on the pair.

Using the stochastic indicator on the above daily chart, we can observe that the Simple moving averages(SMA) are already in the oversold region, this is an additional confluence that buyers are jumping in with their orders.

Conclusion

The unemployment rate is used to measure the percentage of the total workforce that is unemployed and the ones actively seeking employment, however, if the Actual data released is lesser than the Forecast, the Aud/Cad pair will be expected to continue its trend.

What are your thoughts on this Aud/Cad trading idea? Is it useful ? or is it a waste of time? Let us know by commenting on this post or our forum, and be sure to check back shortly for more trading-related content.

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Broadening Wedge: Aud/Cad Trading Ideas

Descending broadening wedge pattern broken, is this actually a trend reversal? volatility spike or fake out? will the pair retest the broken resistance and buy or break down and continue selling?

In this article, we will examine the aud/cad currency pair using the fundamental, technical, and sentiment analysis to find out if this setup is viable, read through to find out more.

Table of Contents

Economic events on Aud

Monetary Policy Meeting Minutes:

The monetary policy meeting minutes are a detailed record of the (RBA) Reserve Bank Board’s most recent meeting, it provides in-depth insights into the economic conditions which influences their decision on where to set interest rates.

Info is released 11 times per year, 2 weeks after the Cash Rate is announced, it is good for currency when more hawkish than expected.

Employment Change:

This measures the change in the number of employed individuals during the past month, it is vital economic data released shortly after the end of a month. The combination of importance and earliness makes for huge market impacts.

Job creation and availability is an important leading indicator of consumer spending, this basically accounts for a majority of overall economic activity, Data is released monthly about 15 days after the month ends, if ‘Actual’ is greater than ‘Forecast’, it is considered good for the currency.

CurrencyForecastPrevious
AUD40.3K12.9K
High Economic Impact

Economic events on Cad

Consumer Price Index (CPI):

The consumer price index (CPI) is the most important inflation-related release due to its earliness and broad scope. It is among the few non-seasonally adjusted number calculation most commonly reported on the calendar.

However it measures the changes in the price of goods and services purchased by consumers, The average price of various goods and services is sampled and then compared with the previous sampling.

Consumer prices account for a majority of overall inflation. Inflation is important to currency valuation because the rise in prices of goods and services prompts the central bank to raise interest rates with respect to their inflation containment mandate.

CurrencyForecastPrevious
CAD0.9%0.9%
High Economic Impact

This data is released monthly, usually on the third Wednesday after the month ends, if the ‘Actual’ outcome is greater than the ‘Forecast’, it is good for the currency.

Retail Sales Ex Autos:

Retail Sales Ex Autos measures change in the total value of sales at the retail level, excluding automobiles, Automobile sales account for about 20% of Retail Sales, it tends to be very volatile and distort the underlying trend.

CurrencyForecastPrevious
CAD2.2%-2.5%
Medium Economic Impact

The core data is therefore thought to be a better gauge for the spending trends, Info is released monthly, about 50 days after the month ends.

Market analysis

Aud/Cad currency pair has been trading within an area of support and resistance zone known as descending broadening wedge pattern, This is a bullish chart pattern (said to be a reversal pattern) which is formed by two diverging bullish lines.

However, the pair made a good oscillation between the two upward lines. The upper line is the resistance line, the lower line is the support line, which is confirmed/valid from our previous analysis.

Conclusion

It further played out as speculated thus testing the diverging support line, from the chart above, we can observe that the pair broke the diverging resistance line during last week’s trading session.

The stochastic oscillator is heading to the oversold level which primarily indicates that the pair will continue its bullish move.

Moreover, since the descending broadening wedge pattern has been broken, it is expected that aud/cad currency pair will retest the broken resistance, probably price level 0.92425, then continue its bullish move if the employment change on Aud is greater or equal to the forecast.

What are your thoughts on this trading idea? Is it useful? or is it a waste of time? Let us know by commenting on this post, visiting our community forum will be best and be sure to check back in the near future for more trading-related content.

AUD/CAD Trade Idea

Aud/Cad Trade Idea ” London Trading Session”.

High probability of short opportunity on AUD/CAD trade idea, Pair pulls back to retest the broken support/supply zone, Wondering if pair will continue or make a new high? Read through to find out more.

Economic Data Events On CAD

Building Permits m/m:

This measures the current changes in the total value of new building permits issued to investors/citizens, It’s an excellent gauge of future construction activity. Basically obtaining a building permit is among the first steps in constructing a new building/residence.

CurrencyForecastPrevious
CAD2.1%1.3%

This is released monthly, about 35 days after the month ends, if the ‘Actual’ result is greater than the ‘Forecast’ then good for the currency.

Employment Change:

This measures the absolute changes in the number and population of employed people during the previous month, It is vital economic data released shortly after the month ends with a huge impact on the economy. The combination of importance and earliness makes for hefty market impacts throughout the period of its release.

Employment creation is an important leading index of consumer spending, This accounts for a majority of overall economic growth and activity.

CurrencyForecastPrevious
CAD24.5K153.7K

It is released monthly, about 8 days after the end of every month, if the ‘Actual’ data released is greater than ‘Forecast’ it is good for the currency.

AUD/CAD

4 Hour Line Forex Aud/Cad Trade Idea

Unemployment Rate:

The unemployment rate measures the percentage of the total workforce that is unemployed people and once actively seeking employment during the past month, Although it’s generally perceived as a lagging indicator.

However, the number of unemployed people is an important signal of overall economic health simply because consumer spending is highly correlated with labor-market conditions.

CurrencyForecastPrevious
CAD6.0%6.0%

The unemployment rate is usually released monthly, about 8 days after the end of the month; if ‘Actual’ released data is less than ‘Forecast’ it is considered by investors good for the currency.

Ivey PMI:

this measures the level of a diffusion index-based Survey of about 175 purchasing managers conducted, selected geographically and by sector of activity to inspect the economy as a whole.

Respondents are asked to rate the relative level of business conditions and activity including employment, production, new orders, prices, supplier deliveries, and inventories.

It’s a leading index of economic health and activities – businesses respond quickly to market conditions, and their purchasing directors hold perhaps the most current and relevant information to the company’s view of the economy.

CurrencyForecastPrevious
CAD64.361.2
Medium

The data is released monthly, about 5 days after the month ends, ‘Actual’ release greater than ‘Forecast’ is good for the currency.

AUD/CAD

Firstly as being the first quarter of the year market seems unpredictable in previous analysis but Aud/Cad pops up a trade idea / short opportunity as the pair pulls back to retest the broken support zone.

Secondly, Before the end of Q4 pair traded sideways as a disagreement between investors which resulted in the formation of a chart pattern considered by investors to be Descending broadening wedge, It is characterized by increasing price volatility and diagrammed as two diverging trend lines, one rising and one falling.

Conclusion

However, AUD/Cad Trade Idea from the 4Hour line chart above we can observe that pair traded with high liquidity around the resistance of descending broadening wedge pattern, later during last week trading session pair broke and made a high of 0.93000 of which it rallied down breaking a key support zone 0.92500.

Moreover, the break in structure was quite a confirmation that the pair will continue bearish throughout the week, AUD/CAD pair sold as speculated and then tested a support zone of 0.91800 which resulted in the current ongoing retracement, this implies that the pair might continue its downtrend.

Additionally paying attention to the upcoming economic data release is necessary because vital information is released which makes a huge impact on the currency.

Australian Dollar - Canadian Dollar Daily Forex Chart

Australian Dollar – Canadian Dollar Forecast

Short-term buy(LONG) opportunity as the Australian Dollar Canadian Dollar pair test the support of the falling wedge.

Economic Events On AUD

Gross Domestic Product (GDP)

Change in the inflation-adjusted value of all goods and administrations delivered by the economy.

It’s the broadest proportion of monetary activity and the essential measure of the economy’s wellbeing.

Delivered quarterly, around 65 days after the quarter closes, ‘Genuine’ is more prominent than ‘Figure’ is useful for currency.

CurrencyForecastPrevious
AUD-2.5%0.7%

Economic Events On CAD

BOC Gov Macklem Hearings

Due to convey introductory statements at a virtual conference held together facilitated by the Bank of Canada and Reserve Bank of New Zealand. Audience questions anticipated.

BOC Governor Jun 2020 – Jun 2027, Volatility is usually experienced during his talks as merchants and investors endeavor to translate loan fee pieces of information.

As head of the central bank, which controls transient loan costs, he has more influence over the country’s currency value than some other individual.

Dealers and investors examine his public commitment as they are frequently used to dropping inconspicuous signs with respect to future moneytary-related approaches.

BOC Governor Tiff Macklem, More hawkish than anticipated is useful for currency.

Bank of Canada (BOC).

Gross Domestic Product (GDP)

Change in the expansion value of all goods, services, and administrations delivered by the economy.

It’s the broadest proportion of monetary activity and the essential measure of the economy’s wellbeing.

Delivered month to month, around 60 days after the month closes, ‘Genuine’ is more prominent than ‘Figure’ is useful for currency.

Source Statistics Canada (latest release)

CurrencyForecastPrevious
CAD0.0%0.4%

AUD/CAD

Building Permits m/m

These measures change the total value of new building permits issued to individuals and investors. It’s an excellent index of future construction activity because obtaining a permit is among the first steps in constructing a new building.

Frequently released monthly, about 35 days after the month ends, if the ‘Actual’ result is greater than ‘Forecast’ then is good for the currency.

CurrencyForecastPrevious
CAD-1.1%4.3%

Conclusion

Firstly from the Daily chart, we can closely observe that the Australian Dollar – Canadian Dollar pair is considerably trading/ consolidating within the falling wedge.

This is a chart pattern considered by investors and traders to be a bullish trend reversal or continuation pattern. The falling wedge pattern is formed when the price bounces between two downward slopings, converging trendlines.

it is Linked using a trend line on lower highs and lower lows, The two lines will slopes downwards and converge.

During the end of October which is the first month of the first quarter(Q1), the Pair made its way to the resistance of the falling wedge though it consolidated a while before breaking the key support level of 0.92800.

Secondly, AUD/CAD pair after the break-in structure got interested retail traders and investors to jump in with their short orders(SELL).

Moreover, the pair from the 2 Hour chart made some swings (Lower Highs and Lower Lows) while it rallied down, Pair has traded and tested the support trend line.

However, with the help of stochastic technical indicator on the Daily chart, its SMA’s are currently at the oversold level which is a key confirmation that the pair will buy.

AUD/CAD Daily Forex Chart

AUD/CAD Market Analysis “Asia Session”.

Daily watch-list on AUD/CAD, the Falling channel seems to be on a breakout, Pair makes Equal lows on key support level 0.19200. Will the pair break out of the falling channel or rally down as usual? Read through.

Economic News on AUD

Consumer Price Index (CPI )q/q:

This measures the change in the price of goods and services bought by consumers.
Although this data is extremely late relative to inflation data from other countries, it’s the primary indicator of consumer prices and tends to produce hefty demand impacts, Consumer prices regard for a majority of overall Inflation.

Inflation is important to currency valuation because rising prices lead the central bank to raise interest rates out of respect for their inflation constraint authorization,
It is released quarterly about 25 days after the quarter ends, If the’ actual’ result is greater than the ‘Forecast’ good for the currency.

CurrencyForecastPrevious
AUD0.8%0.8%
AUD/CAD Daily Forex Chart

Trimmed Mean CPI q/q

It measures a change in the price of goods and services purchased by consumers, excluding the most volatile 30% of items
Data represents the underlying inflation trend through component weighting and anomaly exclusion.
Consumer prices account for a majority of overall inflation.

Inflation is important to currency valuation because rising prices lead the central bank to raise interest rates out of respect for their inflation containment mandate.
This is released quarterly, about 25 days after the quarter ends, if ‘Actual’ is greater than ‘Forecast’ then good for the currency.

CurrencyForecastPrevious
AUD0.5%0.5%

AUD/CAD Observation

Firstly From the Daily Chart, it is clear that Aud/Cad pair has been trading on a falling channel from the start of the first quarter(Q1) therefore making Lower highs(LH) and lower lows(LL).

AUD/CAD

During the third quarter, the pair rallied down from key price level 0.93500 to key level 0.91200 around 230 pips where it made a peak formation low(PFL), However, the pair bounced off the price level 0.91200 back to 0.93500.

Pair at the end of third quarter rallied back down making an equal low which in most cases is considered as a chart pattern “double bottom” if spotted at the bottom of the market.

AUD/CAD Analysis by Chikwem Chinedu Ogugua on Liquiditytradeideas

Technical Indicator

AUD/CAD

From the daily chart using the help of a stochastic technical indicator we closely observed that the SMA’s is already on the over-bought level while the pair is on the resistance zone of the Falling channel, Here the stochastic indicator may not be of help.

We may consider paying close attention to Economic data release/News on both pairs and the market behavior on the following pairs as they are weak positively correlated “USD/CAD” and strong positively correlated “AUD/USD”.

Conclusion

On the 1 hour chart, Aud/Cad pair is in the formation of a chart pattern known as a falling wedge which is speculated by technical traders to be a continuation chart pattern, The pair is likely to break out and find its way to the 0.93500 level.

However, it calls for a short-term buy on the pair. Do you have any contributions pls let us know in the comment session and visit the forum for more discussion.