The AUD and the CAD remain relatively equal currencies, united by a dependence on the same external factors. Previously, both currencies were under pressure due to the trade conflict between China and the US, now due to the coronavirus epidemic in China. All this was reflected in the chart and the formation of a flat trend in the middle of last year, after the downward trend.
The coronavirus has a negative impact on the outlook for the demand for raw materials, particularly oil, which is important for Canada. Oil in February fell to a very low level of 49-50 dollars, although this week it retreated from the minimum, in anticipation of measures from OPEC to limit oil extraction and stabilize the market. Canada's economy is now considered to be much more stable compared to Australia's. The monetary policy of the central banks in these countries is also different. So far, both regulators are calm about the impact of the coronavirus on the world economy and consider this factor to be short-term. However, investors expect that the RBA will still be forced to return to the issue of reducing the rate, given the economic downturn and the necessity to stimulate the economy after large-scale forest fires and a decrease in exports.
Economic indicators confirm the stability of the Canadian economy in spite of all external risks. In particular, the unemployment rate fell to 5.5% in January; 34.5 thousand jobs were created in January, which exceeds forecasts twice. This gives us reason to believe that the deals to SELL will be more effective in the medium term. On the chart, we can see that the rates are increasingly moving closer to the support line, so we can expect its testing and even a downward shift. A resumption of the downtrend after a long period of consolidation is not excluded. Most technical analysis tools also tend to the deals to SELL and confirm our forecast.
