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Tuesday, February 15, Markets Overview

Weekly Fundamental Reports in the US

In the US, all eyes will be on the Retail Sales for the month of January, released on the 16th of February. This report released by the US Census Bureau is a leading indicator that gives important information about consumer spending, which has a significant impact on the GDP. In addition to the headline data, changes in the Retail Sales Control Group could trigger a market reaction as it is used to prepare the estimates of Personal Consumption Expenditures for most goods.

A reading below 2% will be considered bearish for the USD; however, a reading above this estimated number will be considered bullish for the USD.

Another important news will be announced by the FOMC minutes on the same date., FOMC stands for The Federal Open Market Committee organizes 8 meetings a year and reviews economic and financial conditions, determines the appropriate stance of monetary policy and assesses the risks to its long-run goals of price stability and sustainable economic growth. It is usually published 3 weeks after the day of the policy decision.

A bullish tone is likely boosting the greenback, while a dovish stance is seen as bearish for the USD.

Employment and Unemployment rate in Australia

In Australia, Employment Change and Unemployment Rate reports will be announced on Thursday. The Employment Change released by the Australian Bureau of Statistics is a measure of the change in the number of employed people in Australia. A rise in the indicator has a positive effect on consumer spending behaviour which will lead to economic growth.

Therefore, a high reading is seen as bullish for the AUD, and a low reading is seen as negative for the AUD. Moreover, a rate hike in the Unemployment Rate report indicates a lack of expansion in the labour market. A rise above 4.2% leads to a weakening of the Australian economy; therefore, a low reading is seen as positive. However, a reading above 4.2% is seen as bearish.

AUDUSD Technical Outlook:

From a technical perspective, the next support is pegged near the post-NFP swing low, a break below 0.7090 will set the stage for the next support around the 0.7050 regions.  A break below this level will accelerate the downtrend towards the key psychological mark at 0.7000.

If the fall exceeds the psychological level this pair will continue to fall towards the lowest level since June 2020, around the 0.6965 mark.

On the flip side, a swing above the 0.7140 area will cause this pair to move to the next resistance at the 0.7200 mark, followed by the second resistance at the 0.7235 mark. A convincing breakthrough will push the pair towards its January monthly high at 0.7315.

Bank of Canada Announcements

In Canada, all eyes will be on BoC Consumer Price Index Core, which will be released on Wednesday. “Core” CPI excludes fruits, vegetables, gasoline, fuel oil, natural gas, mortgage interest, intercity transportation, and tobacco products. These volatile cores are considered the key indicator for inflation in Canada.

A reading below 4.6% will be considered bearish for the CAD; however, a reading above the estimated number will be considered bullish for the CAD. On Friday, the Retail Sales report for the month of December will be announced. This report shows monthly data of all goods sold by retailers based on a sampling of retail stores of different types and sizes.

A reading above -2.1% anticipates bullish movement for the CAD.

All Eyes on Russian next move:

The possibility of heightened tensions surrounding prospects of a Russian invasion of Ukraine has created geopolitical tension, USD/CAD is trading at 1.2734, and oil prices could still drive into triple digits. Comments were interpreted as if the president of Ukraine had been officially informed that the 16th of February will be the day of the attack.

This news was enough of a scare for the energy market, WTI has witnessed the highest hike in the current bull cycle printing $95.79. And since WTI and USD/CAD have a negative correlation, this major took a down trip to the 1.2719 mark, a break below this level will lead the pair to move to the next support at 1.2682, 1.2644.

Disclaimer: This article is not investment advice or an investment recommendation and should not be considered as such. The information above is not an invitation to trade and it does not guarantee or predict future performance. The investor is solely responsible for the risk of their decisions. The analysis and commentary presented do not include any consideration of your personal investment objectives, financial circumstances or needs.

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