AUD/CAD Trades Sideways Amid Mixed Employment Data and Awaiting Market Clues
Thursday Market Overview:
The Australian dollar (AUD) traded without clear direction on Thursday following mixed employment data that did little to clarify the outlook for interest rate hikes. Meanwhile, the New Zealand dollar faced pressure amid increasing risks of further rate cuts domestically. Market attention is focused on the European Central Bank meeting and the upward trend in oil prices, which could bolster the Canadian dollar (CAD).
Technical Analysis:
On the four-hour chart, the AUD/CAD pair has depicted a bearish outlook after falling below the 34-period moving average and breaking its upward trendline. The pair is currently trading sideways between resistance at 0.92272 and support at 0.92055. Should sellers regain control, breaking below the 0.92055 support level would likely lead to a test of the 100-period moving average around 0.91921. Overcoming this key level would bring subsequent supports at 0.91826, 0.91682, and 0.91570 into focus.
Alternative Scenario:
Conversely, if buyers prevail, breaking through the 0.92272 resistance level could push the price towards the upper resistance at 0.92643, signaling a potential reversal in the current bearish sentiment.
Key Levels:
Resistance Levels:
- Resistance 2: 0.92643
- Resistance 1: 0.92272
Current Price (at the time of analysis): 0.92144
Support Levels:
- Support 1: 0.92055
- Support 2: 0.91921
- Support 3: 0.91826
- Support 4: 0.91682
- Support 5: 0.91570
Impactful Events:
Australian data revealed a net employment increase of 50,200 in June, more than double the forecasts. However, with more people joining the labor force, the unemployment rate remained above 4.1%. These mixed signals from the labor market add uncertainty to the rate hike outlook. Additionally, the ECB meeting and rising oil prices are pivotal events influencing the AUD/CAD pair.
Oscillators and Risk Warnings:
RSI (Relative Strength Index): Bearish, indicating selling pressure.
MACD (Moving Average Convergence Divergence): Bearish, supporting the downward trend.
Moving Averages: Mixed, reflecting the current sideways price action.
Conclusion:
The AUD/CAD pair is trading in a narrow range between 0.92272 and 0.92055 amid mixed economic data and awaiting further market direction. Sellers aiming for a break below 0.92055 could target lower supports at 0.91921, 0.91826, 0.91682, and 0.91570. On the other hand, if buyers regain control, breaking above 0.92272 could push the price towards 0.92643.
Investors should monitor upcoming ECB announcements and oil price trends, as well as further data from Australia and Canada, to gauge potential impacts on the AUD/CAD pair. Staying attuned to these key events and technical levels will help traders navigate the current market environment effectively.
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