The rates since March have been within an upward trend. The Australian dollar has long been supported by the positive dynamics observed in the Chinese economy. Also, there are periodic signals about the successful progress of negotiations between China and the United States. Recently, all commodity currencies have been supported due to the high demand for risky assets and optimism on the market. To a lesser extent this also concerned the Canadian dollar, which is less dependent on the situation in China, but more reliant on oil prices.
The Canadian dollar was under pressure in April despite high oil prices. In the absence of any data on the Canadian economy, the Australian dollar was stronger given the strong macroeconomic reports from China. In addition, the oil market is not so perfect: oil is periodically reduced due to concerns about the overabundance of American oil on the market, so the growth of oil prices is limited. Today the price of the black gold recovered to its maximum in 2019, taking into account the expectations of rising demand for oil in China and the decline in weekly oil reserves in the United States. However, the question about the readiness of the market for further oil increases remains. Therefore, the growth of CAD due to oil is limited without positive data regarding the Canadian economy. Still, there is every reason to expect a strengthening of the CAD today, with the release of new reports on the trade balance and the consumer price index.
The Australian dollar in the absence of news received support as an indicator of the economic situation in China. In addition, given the optimism on the market, the price of raw materials increased, in particular, the price of iron ore. Therefore, despite the plans of the RBA to soften monetary policy and reduce the rate, the AUD managed to strengthen for the first time in a while against the CAD.
Volatility will remain high in the coming days and next week. The most optimal in the medium term would be the deals to buy in favor of the AUD, but the growth will be limited. Most technical analysis tools, including the Stochastic oscillator, also indicate the efficiency of the deals on the trend.
