Australian economic data showed another monthly contraction in the Westpac Leading Index for October as September was revised lower. Skilled Vacancies also posted a contraction, following the disappointing labor report which showed disruptions across the economy. The PBOC cut interest rates by 5 basis points and the AUDCAD remained at support. How will price action react to Canadian inflation data and a sell-off in oil prices? Subscribe to the PaxForex Daily Fundamental Analysis and grow your balance trade-by-trade.
Forex traders will get Canadian inflation data today, with the Bank of Canada leaning towards and interest rate cut, inflation data is becoming more critical. The Canadian Dollar has been under pressure against major currencies after being one of the best performers of 2019. How will today’s CPI data out of Canada influence price action in the AUDCAD? Today’s fundamental analysis will take a look at the upside potential as well as downside risk in this currency pair.
Here are the key factors to keep in mind today for Australian Dollar trades:
- Australian Westpac Leading Index: The Australian Westpac Leading Index for October decreased by 0.07% monthly. Forex traders can compare this to the Australian Westpac Leading Index for September which decreased by 0.12%.
- Australian Skilled Vacancies: Australian Skilled Vacancies for October decreased by 0.9% monthly. Forex traders can compare this to Australian Skilled Vacancies for September which decreased by 0.7% monthly. Chinese 1-Year Loan Prime Rate and Chinese 5-Year Loan Prime Rate: The Chinese 1-Year Loan Prime Rate for November was reported at 4.15% and the Chinese 5-Year Loan Prime Rate was reported at 4.80%. Economists predicted a figure of 4.20% and of 4.85%. Forex traders can compare this to the Chinese 1-Year Loan Prime Rate for October which was reported at 4.20% and to the Chinese 5-Year Loan Prime Rate which was reported at 4.85%.
Here is the key factor to keep in mind today for Canadian Dollar trades:
- Canadian CPI: The Canadian CPI for October is predicted to increase by 0.3% monthly and by 1.9% annualized. Forex traders can compare this to the Canadian CPI for September which decreased by 0.4% monthly and which increased by 1.9% annualized. The Canadian Core CPI for October is predicted to increase by 1.9% annualized. Forex traders can compare this to the Canadian Core CPI for September which increased by 1.9% annualized. The Core CPI-Median for October is predicted to increase by 2.2% annualized and the Core CPI-Trim is predicted to increase by 2.1% annualized. Forex traders can compare this to the Core CPI-Median for September which increased by 2.2% annualized and to the Core CPI-Trim which increased by 2.1% annualized.
Should price action for the AUDCAD remain inside the or breakout above the 0.9035 to 0.9075 zone the following trade set-up is recommended:
- Timeframe: D1
- Recommendation: Long Position
- Entry Level: Long Position @ 0.9055
- Take Profit Zone: 0.9245 – 0.9310
- Stop Loss Level: 0.8990
Should price action for the AUDCAD breakdown below 0.9035 the following trade set-up is recommended:
- Timeframe: D1
- Recommendation: Short Position
- Entry Level: Short Position @ 0.8990
- Take Profit Zone: 0.8835 – 0.8880
- Stop Loss Level: 0.9035
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