Chinese exports as well as imports decreased less than economists expected, but they decreased which shows that the global economy is extending its slowdown. The Chinese trade surplus came in higher than expected, but Australian investment lending unexpectedly dropped. The AUDCAD was able to remain above support as the bullish bias remained in place, how will price action react to the release of key Canadian data? Today’s fundamental analysis will take a look at price action in both directions.
Forex traders await the Canadian employment report for October which is expected to move the Canadian Dollar. Housing data will also be released and is anticipated to add volatility into the AUDCAD to close out the week. Uncertainty in regards to the US/China phase one trade deal started to dominate news, how will this impact price action moving forward? Subscribe to the PaxForex Daily Fundamental Analysis and earn over 5,000 pips per month.
Here are the key factors to keep in mind today for Australian Dollar trades:
- Australian Home Loans and Investment Lending: Australian Home Loans for September increased by 3.6% monthly. Economists predicted an increase of 1.0% monthly. Forex traders can compare this to Australian Home Loans for August which increased by 2.0% monthly. Australian Investment Lending for September decreased by 4.0% monthly and the Owner-Occupier Loan Value increased by 3.2% monthly. Economists predicted an increase of 1.5% and a decrease of 1.5%. Forex traders can compare this to Australian Investment Lending for August which increased by 6.5% monthly and to Owner-Occupier Loan Value which increased by 3.4% monthly.
- Chinese Trade Balance: The Chinese Trade Balance for October was reported at $42.81B. Economists predicted a figure of $40.10B. Forex traders can compare this to the Chinese Trade Balance for September which was reported at $39.65B. Exports for October decreased by 0.9% annualized and Imports decreased by 6.4% annualized. Economists predicted a decrease of 3.9 % and of 5.4%. Forex traders can compare this to Exports for September which decreased by 3.2% annualized and to Imports which decreased by 6.2% annualized.
Here are the key factors to keep in mind today for Canadian Dollar trades:
- Canadian Housing Starts and Building Permits: Canadian Housing Starts for October are predicted at 222.5K. Forex traders can compare this to Canadian Housing Starts for September which were reported at 221.2K. Canadian Building Permits for October are predicted to decrease by 1.8% monthly. Forex traders can compare this to Canadian Building Permits for September which increased by 6.1% monthly.
- Canadian Employment Report: The Canadian Employment Report for October is predicted to show the addition of 10.0K jobs and an Unemployment Rate of 5.5%. Forex traders can compare this to the Canadian Employment Report for September which showed the addition of 53.7K jobs and an Unemployment Rate of 5.5%. Hourly Earnings for Permanent Employees for October are predicted to increase by 4.2% annualized. Forex traders can compare this to Hourly Earnings for Permanent Employees for September which increased by 4.3% annualized. 2.5K Full-Time Positions and 12.5K Part-Time Positions are expected to have been created in October. Forex traders can compare this to the creation of 70.0K Full-Time Positions and to the loss of 16.3K Part-Time Positions which were reported in September. The Labor Force Participation Rate for October is expected at 65.7%. Forex traders can compare this to the Labor Force Participation Rate for September which was reported at 65.7%.
Should price action for the AUDCAD remain inside the or breakout above the 0.9060 to 0.9110 zone the following trade set-up is recommended:
- Timeframe: D1
- Recommendation: Long Position
- Entry Level: Long Position @ 0.9070
- Take Profit Zone: 0.9200 – 0.9245
- Stop Loss Level: 0.9045
Should price action for the AUDCAD breakdown below 0.9060 the following trade set-up is recommended:
- Timeframe: D1
- Recommendation: Short Position
- Entry Level: Short Position @ 0.9045
- Take Profit Zone: 0.8900 – 0.8950
- Stop Loss Level: 0.9100
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