All eyes will be on the major central bankers in the next trading session!
Check out the AUD/CAD hourly chart to see if today’s catalyst can extend the pair’s uptrend!
Before moving on, ICYMI, yesterday’s watchlist checked USD/CHF range support ahead of this week’s high-profile US economic announcement. Check if it’s still a valid play!
And here are the headlines that rocked the market in the last trading session:
Fresh market headlines and economic data:
Inflation in Tokyo hits 4% y/y, showing a stronger upward trend than expected
Japan’s November household spending fell 1.2% year-on-year, first decline in half a year
BRC: UK retail sales surged from 4.1% to 6.5% y/y in December, but still fell for 9th straight month
Asian stocks fell after hawkish remarks by the Fed.Recession risks weigh heavily on commodities
Oil Falls on Fears of Rising Interest Rates to Squeeze Demand
Dollar Weak as Fed Rate Hike Fears Decline
French industrial production rose 2.2% m/m in Nov (0.8% vs. forecast)
BOC and BOJ Governors Macklem and Kuroda join panel discussion at 10:10am GMT
Fed Chair Powell will join a panel discussion at 2:00 p.m. GMT.
Australian Inflation Report at 12:30 GMT (11 Jan)
Get a quick visual overview of price trends in the Forex market with the new Currency Heat Map. 🔥 🗺️
What to watch: AUD/CAD
The AUD has lost pips to the CAD since the beginning of the week when concerns over the Fed’s rate hike overshadowed headlines about reopening the Chinese economy.
Bank of Canada (BOC) Governor Macklem and Fed Chairman Powell join us for a panel discussion, so let’s see if today’s tides favor the AUD.
Note that Powell and his team have hinted that interest rates could reach 5% and remain high in the near future. Meanwhile, the BOC has hinted at a moratorium on rate hikes.
If traders choose to focus on China’s resumption of economic activity and overall risk appetite, AUD/CAD can bounce back from the central channel area and find support from the 100 SMA on the 1-hour chart.
The pair may revisit highs near .9300 or even make new monthly highs.
On the other hand, increased risk aversion could mean further declines in the AUD.
Note the breakout below the mid-channel support zone that we’re eyeing. This could drag AUD/CAD back into its former support zone of .9150.