The rates continue within the downward trend, despite the fact that both currencies are influenced by similar negative factors. Nevertheless, the Canadian dollar is stronger, given Australia's greater dependence on the situation in China, as well as the rapid easing of monetary policy by the Reserve Bank of Australia. The Canadian Central Bank today is the most restrained in changing the rate.
This week, in the conditions of high volatility, we can see on the chart a price correction, which has occurred due to the positive macroeconomic reports on the labor market in Australia. The easing of monetary policy contributed to the growth of activity on the labor market, which in July increased by 41 thousand jobs - 3 times more than expected. In addition, on Tuesday Donald Trump postponed the introduction of new duties on goods from China, which caused a wave of demand for risky assets.
The Canadian dollar, in the absence of macroeconomic reports, retreated against the AUD, taking into account the situation on the oil market. Oil prices have stopped rising amid investors' fear of an upcoming recession in the world economy. So, oil may not find an incentive for growth in the near future, in the absence of positive factors. On the other hand, a decrease in the number of drilling rigs in the US for 6 weeks in a row and OPEC's wish to restrain the decline in prices can contribute to the consolidation of prices near the current level.
We suppose that despite the strengthening of the AUD, in the future the Canadian dollar may be stronger. As the next meeting of the RBA approaches, the AUD will be under pressure because investors will take into account the probability of reducing the rate. The Canadian dollar may strengthen with new macroeconomic reports, which are expected next week. Therefore, the deals on the trend seem to be the most optimal. The MACD and Stochastic oscillators confirm the efficiency of short deals in the short term.
