Canada and China Data May Impact Markets: Indices Remain Strong, Oil Faces Decline

Canada and China Data May Impact Markets: Indices Remain Strong, Oil Faces Decline
Monday saw a rapid strengthening of the American dollar, but it appears that this move will soon become a distant memory as the currency weakens again on Tuesday. Despite this, yesterday's strength drove the EURUSD to test the lower line of the rising wedge pattern, which served as a strong support for buyers. The price is now bouncing back and aiming higher. Meanwhile, on the USDJPY, buyers managed to break through the 133.8 resistance, and today's weakness will likely allow the price to test this level as a support. As long as we stay above it, the sentiment remains positive.
However, the most significant move is currently happening in oil. Last week's upswing was a technical escape from the sideways move created after the bullish gap formed by the OPEC+ output cut announcement. While that was bullish, this week has verified that approach. The prices of both Brent and WTI were unable to hold above the support and came back to the levels seen during the boring sideways trend. In theory, this was a false bullish breakout, and now buyers will have to pay the price, which will probably be a proper decline. Interestingly, today's weaker USD isn't helping oil at all. We can see a positive influence on gold and some other commodities, but not so much on oil.

The indices remain very strong, with major instruments from this category trading close to local highs. Looking at the horizon, there's not much that could change this situation. Today's calendar is rich, but mostly for those trading the Canadian dollar, as we'll get inflation data and a speech from BoC Governor Macklem. During the Asian session, we received an interesting number - China's GDP - which came in much higher than expectations (4.5% vs. 4% exp.). This information is probably now very helpful for stock bulls.

Overall, it seems like it could be a mixed day for the markets, with oil potentially experiencing a decline while other commodities and indices remain strong. The data coming out of Canada and China could also have an impact, so keep an eye out for any changes in sentiment.
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