Commodity Currencies at Strategic Levels. What Can Affect a Breakdown Downwards?

The decline in investor expectations regarding a change in the vector of the Fed’s monetary policy contributes to the fall of not only European, but also commodity currencies. So, in recent weeks:

• AUD/USD has lost more than 200 points and is testing the extremes of 2023 near 0.6400
• USD/CAD is trading at three-year highs and has managed to strengthen by 300 points

What may affect the pricing of the main currency pairs on the market in the coming trading sessions:

• speech by the President of the Federal Reserve Bank of Chicago, Austan Goolsbee (today at 17.30 GMT+3.00)
• publication on the number of active drilling rigs from Baker Hughes (today at 20.00 GMT+3.00)
• announcement on the base lending rate from the People’s Bank of China (Monday at 4.15 GMT+3.00)

USD/CAD

The USD/CAD currency pair has come close to the important range of 1.3970-1.3800, above which the price has not risen since 2020.

Technical analysis of USD/CAD indicates the possibility of a downward correction in the short term, since a dark clouds combination has been formed on the daily timeframe, the development of which could lead to a breakdown of yesterday’s low at 1.3740 and a further test of 1.3650-1.3620. If the upward movement resumes, the price may break through the recent high at 1.3840 and continue to rise in the direction of 1.3970-1.3880.

AUD/USD

A couple of days ago, a bullish harami combination was formed in the AUD/USD pair on the daily timeframe. This formation allowed buyers of the pair to correct to 0.6460. However, it was not possible to start a larger upward correction, and today the recent low at 0.6390 was updated. If this level becomes resistance, the price may decline to the 2023 lows at 0.6290-0.6270.