The downward trend continues despite decrease in the cost of oil. The Canadian dollar is still in a winning position in the confrontation with the Australian dollar. Why? - In order to combat inflation, the Bank of Canada raises interest rates by 100 points all at once, shocking the whole world.They can afford it, relying on a record low unemployment of 4.9%.
The Australian dollar was also supported by a reduction in unemployment, which fell sharply from 3.9% to 3.5%. The trade surplus is at a record high. This allows AUD to consolidate against the Canadian dollar, but no more, because amid fears of a recession, the Australian dollar is the number one risky asset.
In the current situation, special attention should be paid to the situation with oil, which is now putting pressure on the Canadian dollar. At the same time, monetary policy in Canada is the toughest. Overly aggressive action is undesirable and turns away investors. Perhaps now is the ideal time for a price correction since it perfectly matches the downtrend that is currently in place.
The new week will be quieter, without a large number of reports and meetings of central banks. Most technical analysis tools indicate the effectiveness of the deals to BUY, but only in the short term. Since the AUD is the most sensitive currency in terms of risk sentiment, we think the upward rise will be constrained, and we can see how investors are reacting poorly to the achievements of the Australian economy now - because they are not ready to take risks. Therefore, we consider the deals to SELL to be the most reliable and profitable in the current situation.
