Day three: our potential AUD/CAD trade

AUD/CAD has moved higher overnight, with traders seeing Australian business confidence improving yesterday.

AUD notes
Source: Bloomberg

At 10:30am today we get the Westpac consumer confidence report and while there is no survey improvement in this data point could see further gains for the AUD if we see improvement here.

I will be looking at two issues that could suggest closing short positions. Firstly a daily close above the 38.2% retracement of the recent sell-off at 1.0054 would clearly be a bullish development, while the 14-day RSI is threatening to print a higher high.

China CPI at 11:30am is expected to show annual price increases of 2.4%, however goods and service inflation is still expected to be below 2%, with the bulk of price increases coming from food. I don’t expect inflation to influence the FX markets in any great shape.

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