Baxia Markets
May 07, 2024

AUDCAD Sees Volatility Amidst Economic News and Technical Signals

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AUDCAD experienced a rollercoaster ride during today's trading sessions, initially making a new higher high over the Asian trading range before dropping nearly 60 pips in the European session.

Key economic events for the AUDCAD currency pair included the Reserve Bank of Australia (RBA) Interest Rate Decision and Canada's Ivey Purchasing Managers' Index (PMI). The Australian Dollar faced pressure after the RBA's decision to maintain the interest rate at 4.35%, in line with expectations. However, the outcome of the Ivey PMI data release may impact the bearish reversal indications.AUDCAD Sees Volatility Amidst Economic News and Technical Signals

Technical analysis on the 1-hour timeframe reveals mixed signals. While the EMA 50 and 200 indicators suggest a bullish sentiment with EMA 50 positioned above EMA 200, the Bollinger Bands indicate a short to medium-term bearish sentiment as prices broke below the lower band.

Additionally, both the RSI and MACD indicators align with the bearish sentiment indicated by the Bollinger Bands. The RSI entered the bearish zone below 40%, while the MACD sank below the 0 level, coinciding with the RBA interest rate decision.

Overall, long-term indicators lean towards bullish sentiment, while short to medium-term indicators suggest bearish sentiment, implying a market pullback scenario.

Traders are closely monitoring economic developments and technical signals for further insights into AUDCAD's price movements amidst the mixed market sentiment.

Key Takeaways:

  1. AUDCAD sees significant volatility, making new highs then dropping sharply after RBA rate decision.
  2. RBA's decision to maintain interest rates at 4.35% pressures Australian Dollar, awaiting impact of Ivey PMI data.
  3. Technical analysis shows conflicting signals: bullish long-term indicators vs. bearish short-term indicators.
  4. Bearish sentiment indicated by Bollinger Bands, RSI, and MACD post-RBA decision.
  5. Market likely in pullback phase as AUDCAD faces mixed signals from economic news and technical analysis.

Key Economic Releases to Watch Today

AUD, RBA Interest Rate Decision

Actual 4.35% vs Forecast 4.35% vs Previous 4.35%

EUR, German Factory Orders

Actual -0.4% vs Forecast 0.4% vs Previous -0.8%

EUR, German Trade Balance

Actual 22.3B vs Forecast 22.4B vs Previous 21.4B

CAD, Ivey PMI 

Forecast 58.1 vs Previous 57.5


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