AUD/CAD Tests Key Support Amid Rising Manufacturing Sales in Canada

Australia – National Australia Bank (NAB) Limited Business Confidence Index

On Tuesday, at GMT 1:30 a.m., the National Australia Bank (NAB) Limited released its monthly business confidence index figure. This figure measures the level of a diffusion index based on a survey of 350 businesses in Australia.

The survey asks respondents to rate the current business environment in Australia. Businesses are the first to react to changing business conditions. So, binary options traders consider it as a leading indicator of the overall economic health in the coming months. It is because the level of their sentiment can signal optimism and business confidence in the economy.

Last month, the NAB business confidence index reading came out at 6, after coming out at 6 in the previous month as well. If the figure comes close to 6 this month, the value of the Australian Dollar will likely remain unchanged for the time being.

Canada – Manufacturing Sales

On Thursday, at GMT 12:30 p.m., the Statistics Canada will release the month-over-month manufacturing sales data. It measures the changes in the total value of sales made by Canadian manufacturers over the past month.

Changes in manufacturing sales affect the manufacturers’ future decisions regarding hiring, corporate spending, and overall investment climate in the country. Therefore, binary options investors consider the manufacturing sales data as a leading indicator of the Canadian economy.

Last month, the Canadian manufacturing sales figure increased by 1.4%. If the trend continues, it will increase further and have a bearish effect on the AUD/CAD.

AUD/CAD Forecast

Since March 14, the AUD/CAD remained bearish and fell by around 690 pips. However, earlier in May, the AUD/CAD found a strong support near the 0.9550 level. Over the last few months, it mostly traded sideways, but formed a downtrend line. Last week, the AUD/CAD penetrated below this support, but failed to close below it. Currently, the pair is once again testing the support near 0.9550.

The Australian NAB Business Confidence remained stable for the last two months. On the other hand, analysts are expecting the Canadian Manufacturing Sales to go up again. We believe it would set a bearish fundamental outlook for the AUD/CAD this week. Therefore, if the AUD/CAD closes below the support near 0.9550, it would likely attract additional bearish momentum in the market.

Hence, Australian binary options traders should look out for trading opportunities below this major support level around 0.9550.

Asif worked as a prop trader for almost a decade, and later he managed trading operations for one of the largest foreign exchange strategy developers in Europe. Currently, he works as a trading consultant to several brokers and writes on various tech and financial topics. You can reach him at contact@asifimtiaz.com

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Asif Imtiaz

Asif worked as a prop trader for almost a decade, and later he managed trading operations for one of the largest foreign exchange strategy developers in Europe. Currently, he works as a trading consultant to several brokers and writes on various tech and financial topics. You can reach him at contact@asifimtiaz.com

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