Forex Signals – AUD/USD – Markets eye data
The Australian dollar has been on a red-hot streak since April, racking up gains of 15.4% in that time. However, the plucky Aussie has taken a pause and is unchanged in the month of August. Is this hiatus a temporary blip, or has the Australian dollar finally run out of steam?
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Aussie fundamentals started the week on a sour note, as NAB Business Confidence fell to -14 in July, down from +1 beforehand. The indicator has eked out only one gain since November, as the business sector is clearly pessimistic about economic conditions. On Thursday, we’ll get a look at key employment numbers.
The economy is projected to create 30.0 thousand jobs, which would be a huge drop from the previous release of 210.8 thousand. The unemployment rate is expected to increase for a fifth straight time, with a forecast of 7.8%, up from 7.4%. Later on Thursday, RBA Governor Philip Lowe testifies before a parliamentary committee. It has been a relatively quiet week for AUD/USD, but traders should be prepared for stronger movement on Thursday – Forex Signals – AUD/USD – Markets eye data
AUD/USD is trading at 0.7149, up 0.09% on the day. The pair lost ground late in the Asian session but recovered in European trade
0.7123 is a weak support line. Below, there is support at 0.7101
0.7178 is the next resistance line, followed by 0.7211
The 10-day MA remains relevant. Currently, it is trading just below the pair, at 0.7163
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USD/CAD mini-rally continues
The Canadian dollar continues to make inroads against its US cousin. USD/CAD is trading at 1.3251, down 0.36% on the day. It has been a good week for the Canadian dollar so far, as USD/CAD is down 0.98%.
Is Canada’s economy on an upswing?
There are signs that the Canadian economy is gaining some steam, after the economy was hit hard by the Covid-19 pandemic. There was impressive employment data at the end of last week. In July, the economy created 418.5 thousand jobs, above the estimate of 395.0 thousand.
The unemployment rate fell sharply to 10.9%, down from 12.3% beforehand. On Tuesday, Housing Starts jumped to 246 thousand, up from 212 thousand in the previous release. This figure easily beat the forecast of 208 thousand.
The Canadian dollar received a further boost on Wednesday, as US Crude Inventories showed a drawdown of 7.4 million barrels, the third decline in the past four months. Low stockpiles means upward pressure on oil prices, which is bullish for the Canadian dollar, as the country is a major oil producer.
Finally, Canada’s manufacturing sector is looking healthier. After a plunge of 28.5% in April, Manufacturing Sales bounced back with a gain of 10.7% in May.
The estimate for the June release, which will be published on Friday, stands at 16.4%. If we continue to see strong Canadian fundamentals, the Canadian dollar could make further inroads against the greenback.
USD/CAD move slightly higher in the Asian session but then gave up these gains. The pair posted considerable losses in European trade but has reversed directions in the North American session.
- 1.3348 in the next resistance line. This is followed by resistance at 1.3399
- USD/CAD is testing support at 1.3258. The next level is 1.3219
- The pair broke through the 10-day MA line, which is a bearish signal
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