The Australian dollar was supported by GDP growth numbers, which rose 1% in the first quarter of 2018, beating the estimated 0.8%. On an annualised basis, growth was 3.1%, above both the expected 2.8% and the previous quarter’s 2.4% gain.
Trade talks between the U.S. and China are ongoing. China offered to increase the buying of U.S. goods by $25 billion this year which grabbed some attention. The reports said China would step up purchases of crude oil, coal and farm products.
The Canadian dollar came under renewed pressure after White House economic adviser, Larry Kudlow, said on Tuesday that President Donald Trump is considering holding separate talks with Canada and Mexico.
That added fuel to the speculation that the United States could dispose of the North American Free Trade Agreement (NAFTA).
All eyes will be on the Canadian trade balance at 12:30 GMT with a forecast of -3.4B.
Some reports said that at its next policy meeting this month, the ECB could declare on when its quantitative easing program would end.
“The market will start to focus on the ECB from now on. Politics in Italy and Spain will play second fiddle as we now have new governments in both countries,” said Kazushige Kaida, head of foreign exchange at State Street Bank.
On the daily chart, the pair had broken the ascending channel followed by bouncing from the descending trend from the high of 2017 and the key resistance of 111.1.
The price also broke the support 110.05 to reach the next support 108.15 to get back up again from this level to retest the level at 110.05.
As you can see on the chart, the price is moving according to Elliot waves. By forming the A & B waves, we are waiting for the next move down to hit the C level which is located at the support 106.9.
So, any bounce now with price action will enhance the down run.
On the daily chart, we can see that the price is moving sideways between the resistance zone 84.4-84.15 and the support zone 81.2-80.5.
The price now has entered the red resistance area with a possible bounce.
Also, watch the ascending channel which has formed to be considered as a flag pattern. The pattern boosts the original trend which is a down one
So, any bounce now with price action will push the price to fall.
On the daily chart, as we expected before, the price had made its way up to targets at the resistance zone 1.0815-1.0865, boosted by a BAT harmonic pattern.
The price has already made its retracement as we expected it too.
Bouncing from the support zone and the uptrend from the low of April, and the broken descending trend from the high of 2017, the price is supposed to continue its bullish movement up to the 1.1045 level.