The rates have stabilized in August and now we can see a steady downward trend in favor of the Canadian dollar. The Australian dollar remains under pressure as a commodity currency amid developments in the trade war between the US and China. In addition, the soft monetary policy of the RBA, which keeps the rate at a record low of 1.5%, has also had a negative impact on the Australian dollar. As a result, the value of the AUD has decreased against the CAD to the level of April 2016. A similar pattern can be observed witth other base currencies against the AUD.
This week volatility has been decreasing in the absence of any news background. The AUD/CAD currency pair was one of the most stable while investors were focused on the situation in Europe, where falling of the Turkish Lira has had a negative impact on the euro, and traditionally on the situation in the US. The Canadian dollar managed to receive some support from news from the oil market: oil finally stopped its rapid decline, although it lost about $10 per barrel just for 2 months. In addition, the latest inflation data showed a growth by 3% in July, which exceeds expectations on the market and increases the probability of a rate change by the Bank of Canada.
In the near future the rates will depend on the situation on the oil market and the economic situation in Canada. Today volatility will increase with the release of new data about the Canadian basic retail sales index for June, and a week later - data on Canada's GDP in July. According to the chart, we can see the completion of the price correction. Thus, we can expect a further decreasing of the rates towards the support line, to 0.947-0.940 CAD. The most optimal would be short deals on the trend, which is also confirmed by the MACD and Stochastic oscillators.
