The uptrend continues with no signs of completion. It was formed in March 2019, that is, long before the pandemic, and showed that investments in the AUD/CAD were quite reliable. Both currencies are usually under the same pressure factors. Still, in this confrontation, the Australian dollar always wins, while the Canadian dollar is burdened by the situation on the oil market.
This month, the Australian dollar was supported by a sustained recovery in the Chinese economy, which was confirmed by the macroeconomic report on industrial production output and business activity. The growth of consumer sentiment in Australia by 18% in September was also unexpected. This week, the Australian dollar was also supported by the results of the RBA meeting, as well as news that China won the dispute with the US in the WTO.
The Canadian dollar, in turn, is without growth incentives, in the absence of macroeconomic reports. Oil is trading below $40, and forecasts for the demand for black gold are mostly negative.
Next week will be less volatile for the AUD/CAD. No reports on the economy of the two countries are expected, and the rates will be depending on external factors. However, investments in the Australian dollar remain the most preferred among investors when it comes to commodity assets because the Canadian dollar depends on the cost of oil. Most technical analysis tools indicate the efficiency of the deals based on the trend. We also believe that the deals to BUY remain the most effective in the medium term.
