Data watchers will be able to take a breather on Tuesday, as no major releases are expected. That being said, there are a few interesting tidbits that could impact the direction of currency pairs.

The first is a German report on factory orders, which is scheduled for release at 07:00 GMT. German factory orders are forecast to climb 0.6% in December, which translates into a year-over-year gain of 3.1%. That follows a 0.4% drop the previous month.

Shifting gears to North America, the US Department of Commerce will issue its latest trade balance covering the month of December. Washington’s deficit is forecast to rise to $52 billion from $50.5 billion in November.

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North of the border, the Canadian government is expected to post a narrower trade deficit of $2.2 billion for December, down from $2.54 billion the month before.

In monetary policy, Federal Reserve Bank of St. Louis President James Bullard will deliver a speech at 13:50 GMT. As investors recall, the Federal Reserve held off on raising rates last week but is likely to pursue a rate adjustment at its next meeting.

Earlier in the day, the Reserve Bank of Australia (RBA) held its trend-setting interest rate at 1.5%, as was expected by virtually every analyst following the central bank. That being said, the outlook on the domestic economy remains robust.

“The Bank’s central forecast for the Australian economy is for GDP growth to pick up, to average a bit above 3 per cent over the next couple of years,” the RBA said in its official statement. “The data over the summer have been consistent with this outlook. Business conditions are positive and the outlook for non-mining business investment has improved. Increased public infrastructure investment is also supporting the economy. One continuing source of uncertainty is the outlook for household consumption. Household incomes are growing slowly and debt levels are high.”

AUD/USD

The Australian dollar declined sharply following the RBA rate statement, with the AUD/USD currently trading at session lows. The pair is down 0.5% at 0.7850 and faces continued downside as prices fail to extend beyond 0.7900. Overall, the market remains bearish below 0.8000. A future breakdown could expose the low from 10 January (0.709).

EUR/USD

Europe’s common currency drifted lower on Tuesday, as the US dollar continued its long recovery from multi-year lows. EUR/USD dipped 0.1% to 1.2364. From a technical perspective, the pair faces immediate support at the 30 January low of 1.2335.

USD/CAD

The greenback strengthened against its northern rival on Tuesday, climbing 0.2% to 1.2550 CAD. The USD/CAD has bounced sharply from Friday’s low of 1.2260. However, the pair remains vulnerable to pullbacks driven by upbeat Canadian data.

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