The downward trend continues, although since October we have seen an upward movement in favor of the AUD, which is based on the progress in the negotiations between the US and China regarding the trade conflict and even the conclusion of the first part of the trade deal. However, the strengthening of the AUD is caused solely by external factors, while the Australian economy and the RBA policy puts pressure on the AUD. Reports published this week showed the regulator's willingness to cut the rate next year to meet targets in the economy.
The Canadian dollar is also supported by news from China regarding the trade conflict, but to a lesser extent than the AUD. However, the rise in oil prices due to the resolution of the trade conflict significantly affects the CAD. Oil successfully overcame the psychological mark of $60 and continued growing to $60.86. This is not the highest level for the year, which gives us reason to expect further growth in the future. Canada's economy has recently benefited from strong macroeconomic reports. Only last week, the employment market data turned out to be unexpectedly bad; nevertheless, the potential for growth remains. In addition, the conclusion of the NAFTA 2.0 trade agreement with the US and Mexico keeps the value of the CAD high, which ultimately led to the recovery of the CAD against the AUD.
We believe that the deals to SELL will be the most optimal, which is confirmed by most technical analysis tools, including the Stochastic oscillator.
