AUD/CAD has turned lower in the past hour after breaking downtrend resistance early in the day.
This pair reflects divergent fundamentals between Asia and the United States. AUD/CAD has peaked and is moving lower on better US economic data including retail sales and jobs. Meanwhile, Chinese data has continued to disappoint.
The pair has moved in steady trends throughout 2012 and is in the process of a decline to parity. The main upside risks are a Chinese rate cut or soft US economic data.
Technically, the pair declined 300 pips from Aug 6-16 and now appears to be in a retracement phase. Fresh shorts may look to enter at 1.0400/50 as the current retracement extends higher.
The latest data showed Canadian wholesale sales down 0.1% in June compared to +0.1% expected.
