The CAD has been decreasing in price together with oil but now it's going to recover. The deals to SELL seem the most effective.
The rates continue within the downtrend in favor of the CAD. The Australian dollar lost its position under the influence of the trade conflict between the US and China. In addition, the AUD has become completely dependent on China's macroeconomic statistics, while the Australian economy itself does not please investors with its indicators.
This month the situation has changed significantly. The Canadian dollar was under considerable pressure due to the collapse of oil prices, which fell by $17 in a month, which was not expected on the market, considering oil supplies from Iran are rapidly declining due to the sanctions. Amid fears about a deficit, a number of analysts predicted a rise in prices to $100. However, everything turned out the opposite: OPEC countries increased oil extraction, while the growth of oil extraction in the US did not stop for a day. As a result, there was more oil on the market than the market participants wanted, except for the USA. Donald Trump was initially dissatisfied with the rapid growth of oil prices and exerted pressure on OPEC so that the cartel member countries increase their oil supplies to reduce prices.
The reports about the Canadian economy published a week ago were disappointing for investors: the trade balance turned out to be negative, contrary to the forecast. Export and import volumes decreased slightly compared to the previous period. The situation has changed this week, with the publication of positive data on the real estate market. The business activity index also rose to 61.8 pips in October, after falling to 50 pips last month, exceeding market expectations by more than 10 pips. However, this does not impact much on the rates, though it's consolidated at the level of 0.955 CAD.
Next week the AUD can get support with the release of employment data. Investors boldly predict that the number of jobs increased by 20 thousand in October, although a month earlier the growth was only 5.6 thousand. At the same time, the Canadian dollar will be influenced by the situation on the oil market and can confidently count on support, given that now oil costs below 60 dollars and has the potential to recover. Oscillators (MACD, Stochastic, RSI) unanimously indicate the rates in the overbought zone and efficiency of the deals on the trend. As you can see on the chart, such a scenario is most likely, and after testing the resistance line the rates will continue to move along the downtrend.
