USDCAD: Favours further upside & disappointing CPI

MARKET SNAPSHOT:

ASIA HANDOVER:

FX:

Whilst volume has been a little thinner due to the JPY bank holiday, the Aussie Dollar has seen the most action today gaining ground against all majors:

• AUDNZD traded up to a 4-day high of 1.062; A break above 1.0625 confirms a double bottom pattern

• AUDJPY traded to a 2-day high but technically trading sideways;

• AUDCAD is within a bullish trend with 1.023 within its sights.

• EURAUD edging lower to an intraday 10-day low. The daily charts still appear to be forming a head and shoulders reversal where a break below 1.50 confirms.

INDICES:

A day of tumbleweed aross Asian equities, all seemingly waiting for the weekend.

• AUS200 caught within a 26-point range following yesterday's Riskshaw Man Doji

• Nikkei 225 drifts higher, up just 0.2% at time of writing

• Similar sotry with Hang Seng, down -1.5%

COMMODITIES:

• Gold has traded up to yesterday's high and (so far) above the 200 day eMA. If it remains within the bullish channel then $1337 and $1350 are the next targets

• Palladium trades higher following yesterday;s volatile bullish hammer to suggest a swing low has formed and continuation of the bullish trend

COMING UP:

CHARTS OF THE DAY:

USDCAD: Favours further upside & disappointing CPI

When I took a cursory glance at the CPI and the forecast of 0.5% I immediately noted the following:

• It hasn’t been above 0.2% since last March

• March must be a seasonal tendency for positive CPI

• The CPI frequently falls short of the expectation

• There is lots of weak data coming out of CAD so my 'guestimate' is to fall short on CPI.

In the event the seasonal tendency of good CPI comes to fruition, then (depending on how good) I would expect a retracement towards the broken neckline. At which point, going into next week, I would be seeking bullish setups once more.

NZDCAD: Potential bullish wedge forming ahead of CAD CPI

Whilst this is a pair I'd imagine to many would not tend to look at my justification is as follows:

• NZD is one of the stronger G10 pairs

• CAD is one of the weakest

• I expect CPI to disappoint (hence CAD weakness)

• We're clearly within an uptrend, within a bullish channel

• The correction appears to be forming a bullish reversal pattern

Worst case scenario is CPI comes in much better than expected and you can forget the above. Price may well break below 0.9550 support zone and target 0.9520 and the lower bullish channel.