The rates continue in favor of the Canadian dollar, which is supported by the rally on the oil market and, of course, the monetary policy of the Bank of Canada. At the same time, we observe a consolidation in the rates that started in May in the range of 0.9254 - 0.9399 CAD. These are the minimum levels for the year. The quotes were lower than now only in October 2020, as well as in the period up to June 2020, when the Canadian dollar was weakened due to the fall in oil prices at the height of the pandemic.
The market is now in a completely different situation. Oil is getting more expensive, and according to the forecasts of the largest oil companies, it may well rise to $100, primarily due to the recovery in demand for aviation kerosene and the recovery of industrial production in the United States and China.
Over the past seven days we have not received any macroeconomic reports from Canada, although the Canadian dollar already has enough growth incentives, given the forecasts for rising oil prices, but the macroeconomic reports in Australia were very interesting for investors. In particular, the data on the labor market was very encouraging: in May, 112 thousand jobs were created, and unemployment fell from 5.5% to 5.1%. At the same time, the decline in business activity indices for the third month in a row, as well as the comments of the head of the RBA on the need to extend the bond purchase program, put pressure on the Australian dollar, as a result of which, the CAD held its positions.
We believe that the consolidation will not last long. The Canadian dollar has the potential to strengthen further against the AUD, at least until oil prices start to decline significantly. Most of the technical analysis tools indicate the efficiency of the deals to SELL today. The entry points to the market may also be at the levels of 0.9254 and 0.9399. The probability of reaching the first one is more likely at the moment.
