The Canadian dollar remains stronger versus the AUD, so the downtrend continues, after a two-month long price correction. In April, the Canadian dollar was under the strongest pressure due to the collapse in oil prices, while the AUD, on the contrary, received support due to the recovery of production output in China and relatively good macroeconomic reports.
In May, the situation on the oil market began to stabilize. Oil recovered quickly in price, from 0 to 23 dollars, taking into account the gradual exit of countries from quarantine, which allows investors to hope for a recovery in the demand for oil. Therefore, the CAD strengthened and began to fight on an equal footing with the AUD, which is under pressure this week due to tensions between China and the US. A rapid strengthening of the Canadian dollar did not occur, given the good results of the RBA meeting for the AUD and positive reports on retail sales. However, the Canadian economy, in the absence of additional pressure from oil, makes investment in the CAD promising. In particular, yesterday it was reported that the trade deficit grew more modestly than expected in March, due to a weak decrease in exports and imports. This allows us to expect an even better trade balance in April.
On the chart, we can see all the signs of a completion of the price correction, with the loss of upward momentum, which gives us a reason to expect a continuation of the downward trend. The MACD and Stochastic oscillators are also unanimous regarding the efficiency of the deals to Sell in favor of the CAD.
