Trading company SEB have suggest to clients to get short AUD/USD. They report “the RBA left its cash rate unchanged at today’s meeting. However, the statement gives a clear signal more rate cuts should come. The AUD appreciated following the decision as a rate cut was widely expected. Use this uptick as an opportunity to short the AUD/USD”.
Sell AUD/USD at 0.7810 targeting 0.73, stop loss on daily close above 0.7930.
As the markets open in the US on Friday morning, we will get the latest Canadian inflation data reported out of the nation.
Capital Trust Markets reports “the Canadian dollar gained strength during today’s session on the back of better-than-expected wholesale sales data, and markets will be looking for strong inflation figures to reinforce the data and compound the bullish momentum. With this in mind, what’s expected and how can we set up to profit from a release either side of the consensus forecast? Here is what you need to know.
First, what did the wholesale sales data tell us about the Canadian economy? The data – reported at 1.8% growth versus a forecast of 0.7% – comes amid a spate of strong releases this month. Manufacturing sales beat expectations of 2.1% at the end of last week, while unemployment throughout October dipped to 6.5% with employment rising 43.1 K, and building permits reported at the beginning of the month expanding by 12.7% month over month during September. This being said, there are some concerns about deceleration in the house price growth over the last few months, and this is likely to force the bank of Canada to hold interest rates at their current lows so as to avoid jeopardizing any sustainable growth over the coming quarters. With this in mind, what of levels to keep an eye on in the USDCAD? Take a look at the chart below.
As the chart shows, we have seen a certain amount of consolidation in the pair over the past few weeks. However, we could see this consolidation come to an end and the US dollar resume its upside momentum versus its Canadian counterpart, as we approach a combination of key level and 200 SMA support. 1.1266 and 1.1464 are the levels to keep an eye on. Consensus forecasts the upcoming core CPI data (MoM) – the likely headliner – at 0.2% for October. With this in mind, look for anything below to reinforce aforementioned support and validate 1.1464 medium-term to the upside”.
(Source: Capital Trust Markets)
Capital Trust Markets reports the “Swiss Franc is showing strong bullish intentions against Yen as short positions unwind at a face pace.
CHF/JPY 4H Chart
CHF/JPY technical landscape has been very predictable in recent weeks, without any fake signals, at first respecting a bearish configuration and more recently forming a strong reversal pattern. With a relatively light news calendar, we expect traders to act in a foreseeable way during today’s U.S. trading session and early next week as well.
After last week’s downtrend invalidation, when price broke rallied above the most recent lower highs at 112.80 and 112.95, CHF/JPY retraced for most of this week. Once price hit 61.8% retracement level was hit in the early hours on Thursday, large offers lifted price throughout the day, forming a bullish engulfing bar on Daily.
Spot is currently trading around 113.45. Sellers are still defending 113.50 (20th October high, 200 Moving Average on 4H and 38.2% Fibonacci level on September – October downswing), yet bullish momentum still points to a breakout. A successful breach and close above 113.50 will confirm CHF/JPY is turning bullish from a swing perspective. Upside targets are begin at 114.10 (50% Fib), with a large resistance cluster between 114.50 and 115 being the main area of attraction for buyers”.
(Source: Capital Trust Markets)