The rate has consolidated in the range 0.9899-0.9995 CAD since mid-February. Overall, we can see on the chart the continuation of the uptrend which is losing its intensity. The Australian dollar has remained stable, while the Canadian currency is under pressure from falling oil prices, although the price of $60 per barrel is still significantly higher than the price from 2016-2017, when oil cost about $10 less. Oil traditionally becomes cheaper because of the increase in oil reserves in the United States and the growth of oil extraction, with the achievement of new record volumes.
This week all commodity currencies found themselves under pressure due to the strengthening of the US dollar. However, investors expect Canada's GDP data to be published today and the decisions of the Central Banks of both countries, which will be known next week. Therefore, the volatility of the AUD/CAD will increase in the near future. Still, investors do not expect the Central Banks of Canada and Australia to change the rate, although this decision in any case will not support the CAD or AUD. The latest data on the Canadian economy is contradictory. On the one hand, the volume of retail sales in December fell by 0.8%, which is the sharpest decline in retail trades since December 2015. At the same time, for the first time in five months in December the Canadian budget surplus was fixed, which is a positive signal for the Canadian economy.
At the moment, the rates are in the overbought area, as indicated by the Stochastic oscillator. Therefore, the probability of a price correction is high. In addition, the CAD is likely to receive support after the release of GDP data today. Thus, short deals can be effective in the near future. In the medium term, the most optimal would be the deals on the trend. Entry points to the market can also be specified at the levels of 0.9899 and 0.9995 CAD. The achievement of the latter is most likely.
