USD/CAD Likely Break the Support Near 1.3350 Amid Strong Improvement in Canadian Manufacturing PMI
USD/CAD Forecast & Technical Analysis United States – Institute for Supply Management (ISM) Manufacturing PMI…
On Tuesday, at GMT 1:30 a.m., the National Australia Bank (NAB) Limited released its monthly business confidence index figure. It measures the level of a diffusion index based on a survey of 350 businesses in Australia.
The survey asks respondents to rate the current business environment in Australia. Businesses are the first to react to changing business conditions. So, Forex traders consider it as a leading indicator of the overall economic health in the coming months. It is because the level of their sentiment can signal optimism and business confidence in the economy.
Last month, the NAB business confidence index reading came out at 23. This month, it went down and came out at 20.
On Thursday, at GMT 12:30 p.m., the US Bureau of Labor Statistics will release the month-over-month consumer price index. It measures the changes in the price of products and services bought by American consumers over the past month.
CFD traders consider the US CPI to be the most important fundamental indicator to measure the inflation in the economy. This is because the Federal Reserve also uses the CPI to decide about setting future overnight interest rates. Hence, a rising CPI signals to the Forex market that there would be an increase in the future interest rates.
Last month, the US CPI went by 0.8%. Analysts are expecting it to go up by 0.4% over the last month.
Over the last few days, the AUD/USD remained range-bound. During this time, it mostly traded between the 0.7675 and 0.7770 levels. On June 3, it momentarily broke below the support but promptly returned back to the range and formed an uptrend line on the hourly chart. Earlier today, it broke below the uptrend line. Currently, it is testing the support near the 0.7730 level.
The Australian NAB business confidence came out lower than the previous month, at 20. By contrast, analysts are expecting the US CPI rate to remain positive and come out at 0.4%. We believe it would set a bearish fundamental outlook for the AUD/USD this week. Therefore, if the AUD/USD closes below the support near 0.7730, it would likely attract additional bearish momentum in the market.
Hence, CFD traders should look out for trading opportunities below this major support level around 0.7730.
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 email@example.com
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