Canada’s shock fee hike received merchants promoting AUD/CAD yesterday!

In case you missed it, the Financial institution of Canada (BOC) raised its rates of interest by 25 foundation factors to 4.75% after preserving it at 4.50% for 3 selections in a row.

AUD/CAD, which was consolidating close to .8980, fell to the .8900 psychological space earlier than sufficient AUD consumers stepped in.

AUD/CAD 1-Hour Foreign exchange Chart by TV

What makes yesterday’s downswing fascinating is that it stopped at an ascending channel resistance that’s been round all month.

Not solely that, however .8900 additionally strains up with the 61.8% Fibonacci retracement of this week’s upswing, final week’s resistance zone, AND the 100 SMA on the 1-hour timeframe.

Are we seeing a pullback from a broader uptrend?

Phrase round Asian session merchants is that Chinese language banks have lowered their rates of interest on the authorities’ “requests.”

The sudden stimulus helped carry AUD towards a few of its counterparts, and the optimism might achieve traction within the subsequent buying and selling periods.

I’ll hold shut tabs on tonight’s Chinese language CPI information to see if AUD’s upswing is sustained.

Markets see producer costs falling by one other 4.3% y/y (from -3.6%) in Could whereas CPI might are available in at 0.2% y/y from April’s 0.1% studying.

Decrease-than-expected CPI would help the Chinese language banks’ fee cuts and doubtless encourage a risk-friendly buying and selling atmosphere.

AUD/CAD might bounce again to its .8980 earlier highs if not the .9000 main psychological degree.

If China’s worth indices underscore disappointing post-lockdown development, nevertheless, then AUD might proceed to dip towards CAD.

For now, I’m on the bullish facet discovering inexperienced candlesticks and aiming for earlier highs.

What about you? Are you pondering of shopping for AUD/CAD at the moment?

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