USDCAD and USDJPY key pairs to watch on Wednesday

We anticipate some volatility after key economic data: Chart

Charts (6)

The US Dollar was bearish against most of its major pairs on Tuesday with the exception of the NZD, AUD and CAD. On the US economic data front, Retail Sales Advance rose 0.3% on month in October (+0.5% expected), compared to a revised +1.6% in September. Finally, Industrial Production increased 1.1% on month in October (+1.0% expected), compared to a revised -0.4% in September.  

On Wednesday, the Mortgage Bankers Association's Mortgage Applications data for the week ending November 13th is expected. Finally, Housing Starts for October are expected to rise to 1,460K on month, from 1,415K in September.                 

The Euro was bullish against most of its major pairs with the exception of the CHF, GBP and JPY. In Europe, no major economic data was released.

The Australian dollar was bearish against all of its major pairs. 

On Wednesday, Canada is expected to report an inflation rate of 0.3% YoY in October compared to 0.5% in the month prior. We have seen an average of 69 pips of volatility after past inflation reports. The pair remains in a consolidation pattern between 1.299 support and 1.342 resistance. A double bottom may be in play but is not confirmed until price action breaks above 1.342 resistance. The preference is for a rebound higher towards 1.365. 

Source: GAIN Capital, TradingView

Japan will report its October trade balance which likely narrowed to 210 billion Yen on a seasonally-adjusted basis from 675 billion Yen in September as new lock downs due to the coronavirus slow exports. We measured 26.5 pips volatility in the 4 hours after past events. Looking at the chart of the USD/JPY ahead of the data, key resistance remains at the 106.10 level. A break above could have strong bullish implications. For now, the preference is to ride the trend lower ultimately reaching the 102 support level. 

Source: GAIN Capital, TradingView

Happy Trading

More from Forex

From time to time, StoneX Financial Pty Ltd (“we”, “our”) website may contain links to other sites and/or resources provided by third parties. These links and/or resources are provided for your information only and we have no control over the contents of those materials, and in no way endorse their content. Any analysis, opinion, commentary or research-based material on our website is for information and educational purposes only and is not, in any circumstances, intended to be an offer, recommendation or solicitation to buy or sell. You should always seek independent advice as to your suitability to speculate in any related markets and your ability to assume the associated risks, if you are at all unsure. No representation or warranty is made, express or implied, that the materials on our website are complete or accurate. We are not under any obligation to update any such material.

As such, we (and/or our associated companies) will not be responsible or liable for any loss or damage incurred by you or any third party arising out of, or in connection with, any use of the information on our website (other than with regards to any duty or liability that we are unable to limit or exclude by law or under the applicable regulatory system) and any such liability is hereby expressly disclaimed.