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USDCAD, AUDUSD CURRENCY VOLATILITY – TALKING POINTS:

  • USDCAD and AUDUSD overnight implied volatility climbs to 6.3 percent and 7.5 percent respectively as currency traders gear up for potential spot market price action in response to a slew of economic data tomorrow
  • Upcoming oil market data in addition to Canada’s latest inflation reading both have potential to weigh on the Canadian Dollar while Chinese GDP data will likely drive the market’s overall appetite for risk which could dictate the direction of the Australian Dollar

Forex traders could see an influx of price action across the currency market tomorrow according to rising overnight implied volatility measures. The uptick in anticipated price action is likely attributable to uncertainty posed by the laundry-list of economic events and data releases expected over the next 24-hours which have potential to spark overdue currency volatility.

FOREX MARKET IMPLIED VOLATILITY AND TRADING RANGES

Forex market implied volatility and trading ranges EUR, GBP, JPY, USD, CAD, AUD, NZD, CHFForex Market Implied Volatility AUDUSD, USDCAD, NZDUSD, EURUSD, GBPUSD, USDJPY, USDCAD

While NZDUSD overnight implied volatility soared to a 2-month high ahead of New Zealand’s inflation data which is expected to cross the wires later in today’s session, USDCAD and AUDUSD could be of particular interest tomorrow considering Canadian CPI and Chinese GDP.

FOREX ECONOMIC CALENDAR

Forex market economic calendarCurrency economic calendar

Visit the DailyFX Economic Calendar for a comprehensive list of upcoming economic events and data releases affecting the global markets.

China’s highly-anticipated GDP release will likely set the tone across risk assets with the data being closely scrutinized by market participants for signs that the world’s second largest economy is rebounding from its recent growth slowdown. Due to the close trading relationship between China and Australia, a positive report has potential to boost the Aussie.

As for USDCAD, the loonie could come under pressure if March Canada inflation prints below expectations. Climbing oil prices are projected to have lifted Canada’s CPI, however, due to the country’s high reliance on the energy market. Moreover, upcoming crude inventory data out of the US has potential to drive additional USDCAD price volatility with a positive response in oil likely translating to a boost in the Canadian Dollar.

USDCAD PRICE CHART: DAILY TIME FRAME (JANUARY 11, 2019 TO APRIL 16, 2019)

USDCAD Price Chart Technical Analysis Outlook

Judging by USDCAD overnight implied volatility data, the currency pair is calculated to trade between 1.3313 and 1.3401 with a 68 percent statistical probability over the next 24-hours. The implied low could serve as an area of confluence seeing that uptrend support and the 38.2 percent Fib align with this level.

On the other hand, USDCAD upside could be limited by Tuesday’s intraday high which appears to have formed a series of tops where the implied high rests slightly above the 23.6 percent Fibonacci retracement line.

AUDUSD PRICE CHART: DAILY TIME FRAME (DECEMBER 26, 2018 TO APRIL 16, 2019)

AUDUSD Price Chart Technical Analysis Outlook

AUDUSD overnight implied volatility suggests spot prices will continue to hold a tight trading range and fluctuate between 0.7146 and 0.7202. The forex pair’s recent upside looks to have eclipsed resistance at the 23.6 percent Fibonacci retracement line with AUDUSD bulls likely eyeing a fresh month-to-date high.

Although, further advances could be hindered by the topside rising trendline formed by the highs recorded in March and April. Yet, bearish economic data could quickly sour sentiment tomorrow and accelerate a selloff. If the 23.6 percent Fib and implied low fail to support spot prices, downside could target the 38.2 percent Fibonacci retracement level.

TRADING RESOURCES

Whether you are a new or experienced trader, DailyFX has multiple resources available to help you: an indicator for monitoring trader sentiment; quarterly trading forecasts; analytical and educational webinars held daily; trading guides to help you improve trading performance, and even one for those who are new to FX trading.

- Written by Rich Dvorak, Junior Analyst for DailyFX

- Follow @RichDvorakFX on Twitter