The Canadian dollar managed to buck the trend and rise up the charts today against the USDCAD as despite keeping rates on hold at 0.50% and Ivey PMI slipping to 52.3 (55.9 exp) the CAD remained firm. But this was not just purely on the back of positive data, instead it was helped also by oil prices managing to rise and the Canadian dollars correlation with oil prices also helping to drive home the movements that we saw against the USD. Oil’s jump was led in part by talk of a large drawdown in US crude oil inventories, but at the same time it was announced that 3 billion barrels had been found in West Texas via shale and this was likely to put into production in the next few years. For me the Canadian dollar continues to be a popular currency to trade with its strong swings being attractive to traders

Looking at chart movements it’s clear that a bullish trend line on the daily chart is having a large impact for traders, and any movements lower are likely to find support at this key area. The push back up to resistance at 1.2913 lacked momentum today, but a touch on the trend line could lead to a push through this level with some serious volatility. If the trend line was likely to break then I would expect a push down to support at 1.2568 as traders look to take the wind out of the bulls.

The Australian economy had a bad day yesterday when it came to economic data and today was not to different with GDP figures showing a drop much worse than expected. GDP q/q was down to 0.5% (0.6% exp) and GDP y/y slipped to 3.3% (3.4% exp). By any standards this is still a strong reading for any developed economy, but in the case of Australia it shows the economy consistently slowing down at present with sluggish capital spending and all the PMI figures showing a slowdown it’s a matter of time before the Reserve Bank of Australia talks down the AUD over the issues that are at hand. With all of the current issues a rate cut will also being priced in by the market, and bets are likely to increase with further negative data that the rate cut will come sooner rather than later. There is little hope in waiting for a US rate hike at this stage to help push the AUD down, as data continues to be a mixed bag throughout the USA.

The AUDUSD has so far stalled from going any higher at 0.7690 as it acts as a strong level of resistance in the market. At this stage given the negative fundamental data it’s likely that the bears will use technical’s to play the AUDUSD down in the long run, while also betting on the Reserve Bank of Australia to say something. Support levels can be found at 0.7635 and 0.7582, with traders likely to targets these levels as the AUDUSD falls and the bears look to make the most of the negative fundamental data we are seeing.