EURUSD fell at the beginning of trading today, in the European market, and recorded its…
AUD/CAD Likely to Remain Bearish Amid Weak Commodity Prices in Australia
Australia – Commodity Prices
On Thursday, at GMT 5:30 a.m., the Reserve Bank of Australia will release the Commodity Prices data. It measures the changes in the selling price of exported commodities.
Australia is a mineral rich nation. It exports a significant amount of minerals and other natural resources. A growing Commodity Price means more value added to the economy. So, it creates more demand for the Australian Dollar. Hence, binary options traders consider Commodity Prices to be an important indicator for the economy.
Last month, the Australian Commodity Prices decreased by -5.0%. If the negative trend continues, it will bring down the value of the Australian Dollar.
Canada – Manufacturing PMI
On Thursday, at GMT 2:30 p.m., the Markit will release Canada’s manufacturing purchasing managers’ index (PMI) figure. It measures the level of a diffusion index by surveying around 400 purchasing managers in the country.
Businesses are the first to react to changing economic climate. The manufacturing PMI is calculated based on survey questions covering employment and production. Also, price levels and new orders situation. Hence, binary options investors consider this data to be a leading indicator of the overall economic health of the country.
Last month, the Canada’s manufacturing PMI reading came out at 51.4. If it remains above the 50 level, it will likely strengthen the value of the Canadian Dollar against other currencies.
On December 18, 2019, the AUD/CAD broke below the uptrend line. However, soon it resumed the uptrend. After reaching the 0.9135 level, it again found a strong resistance. Over the last two weeks, it remained trapped within the uptrend line and the resistance near 0.9135 level. Currently, it is once again testing the 0.9135 level.
The Australian Commodity Prices fell by -5.0% last month and it will likely go down once again. On the other hand, the Canadian Manufacturing PMI will likely remain positive above the 50 level. We believe it would set a bearish fundamental outlook for the AUD/CAD this week. Therefore, if the AUD/CAD remains below the resistance near 0.9135, it would likely attract additional bearish momentum in the market.
Hence, Australian binary options traders should look out for trading opportunities below this major resistance level around 0.9135.
Market Analyst / Trading Consultant . Asif worked as a prop trader for almost a decade, and later he managed trading operations for one of the largest foreign exchange strategy developers in Europe. Currently, he works as a trading consultant to several brokers and writes about various tech and financial topics. You can reach him at firstname.lastname@example.org