BK AUD/CAD Big Trade – Close at 0.9765
AUD/CAD Big Trade
SELL AUD/CAD at market ( now 0.9828)
Stop at 1.0028
The Australian dollar is in play tonight with labor data on the calendar. Thanks to the rise in commodity prices and improvement in risk appetite, AUD was the day’s second best performing currency behind the CAD. However tonight’s employment report could erase the gains in the currency. While the retail sector helped offset the losses in mining, Australian mining companies are now on the verge of bankruptcy and we could see thousands of layoffs over the next several months. According to the PMIs, weaker employment conditions were seen in the manufacturing and service sectors in the month of January. This signals that there was very little recovery in the labor market after net job losses in December. Given the importance of job growth, a soft report could trigger a significant reaction in AUD and highlight the contrasts between Australia and Canada’s economies.
Crude prices jumped 7% today after Iran said they would support OPEC’s production freeze. While there has been some confusion as to whether “support” equals action, oil traders are simply relieved that the world’s fourth largest holder of oil reserves is willing to cooperate. Yet after 3 years of Western sanctions, Iran is finally able to bring production up to competitive levels and they are on a campaign to increase output by at least a third this year. So it remains to seen how willing they really are to limiting output levels. With OPEC not scheduled to meet again until the summer, these positive headlines should fuel a stronger recovery in oil. The Canadian dollar has already responded well with other commodity currencies also participating in the rally. USD/CAD closed below 1.3800 and the next stop should be the 100-day SMA at 1.3600.(edited)
**If AUD/CAD is trading lower than 9820 then place limit order otherweise go market