The Сanadian dollar is under intense pressure due to the falling of oil prices. The rates of CL are dropping and cannot find a base to stabilize. At the moment the price of a barrel of oil CL/WTI costs $45.39. Such a low level of prices has been reached only once this year. After positive GDP data in Canada at the beginning of the month there were many factors that had a negative impact on the Canadian dollar. In addition to the drop of oil prices, the market also dissapointed with statistics about a reduction in the number of building permits by 0.2%, while investors expected in April an increase by 2.4%. Furthermore, we learned that the reduction of business activity index in Canada (PMI) is 53.8 against the expected 62. A month earlier, the index reached a level of 62.4.
Given the multiple factors against the CAD it is not difficult to assume that the upward trend of the AUD/CAD will continue. Nevertheless, the Australian dollar deserved to grow even despite the weakening of the Canadian currency. This week there was data about the GDP for the first quarter of 2017: it has grown to 0.3 percent, slightly exceeding the forecast; yoy GDP growth is more impressive - 1.7% vs. the expected growth of 1.5%. The reserve Bank of Australia left interest rates unchanged and indicated further economic growth in the next few years. The situation with Australia's trading partners is also in favour of Australia. Recently received statistics about China showed growth in exports and imports by 8.7% and 14.8%, significantly exceeding forecasts. In particular, the volume of iron ore imports in May increased by 11%; imports of aluminium and copper also increased significantly.
Oscillators indicate different signals. The Stochastic indicator signaled the beginning of a price correction and a good time for opening deals against the trend. In short-term trading such deals may be rather effective, especially given that today we expect data about the change in employment in Canada which can support the CAD. Still, there are not enough preconditions for a trend change. So, in medium-term trading it is better to trust the MACD oscillator and open the deals to BUY.
