The rates continue within the downward trend in favor of the CAD. Both currencies are influenced by the same external negative factors, and in this case, the decisive factor are the economic indicators in Australia and Canada, as well as the monetary policy of the central banks of these countries. As it turned out, under the influence of the trade conflict between China and the United States, Canada's economy was more stable. In addition, the Bank of Canada pursues the most hawkish monetary policy among the marketmaking countries, unlike Australia, where the RBA actively cut the rate during this year and is ready for a further decrease.
Since November, the AUD/CAD rates changed slightly and froze in anticipation of news about the resolution of the trade conflict. However, the process is dragging on and both commodity currencies have come under pressure. Macroeconomic reports did not support any of the currencies: in Canada, business activity fell sharply in October, to 48.2 pips, although in August the index was 60.4 pips; in Australia, the RBA has not changed the rate, but is ready to do it, and analysts estimate that one reduction will occur early next year.
In this situation, we believe that the most effective would be the deals on the trend. Economists rate the CAD's perspective for growth highly, even against the USD, not to mention weaker currencies. On the chart, we see the completion of the price correction and a readiness for a further decrease, while the MACD and Stochastic oscillators indicate the efficiency of short trades.
