The world economy is on the edge of recession, interest rates are rising, and the dollar is strengthening. All of these factors are affected the currency market.
Investors expect further events in the prolonged negotiations on the debt ceiling. The strengthening of the dollar limits the growth of other currencies.
On Wednesday, U.S. Treasury Secretary Janet Yellen reminded again that early June is the deadline for deciding on the national debt issue. Soon she will provide Congress with updates on the government's financial situation.
The dollar index is staying steadily near the highs, and strengthens the position of the Canadian dollar by correlating.
Chinese statistics this week disappointed market participants with a series of poor economic indicators that indicate weak consumer demand and assume that the post-pandemic recovery is already exhausted.
Ken Cheung, chief currency strategist for Asia at Mizuho Bank, noted that the People's Bank of China (PBOC) has not shown much interest in protecting the yuan.
He expects the yuan to remain under pressure until the country's economic data show improvement or the NBK takes measures of monetary policy to stabilize the currency market.
The Australian dollar has strongly felt the impact of China's economic weakness due to their close trade ties. The AUDCAD pair price fell to a five-month low on Thursday.
Australian retail sales will be published tomorrow at 00:30 GMT. This macroeconomic indicator is the volume of sales on goods and services to final consumers for a certain period of time. Along with GDP, inflation and the unemployment rate, retail sales are on the list of the most important macroeconomic indicators. Sales for the month are expected to decline by 0.3%. Confirmation of the forecast may reduce positions of the Australian currency.
AUDCAD pair price shows a clear downtrend. On the H1 timeframe, the price is in the formation of the third descending wave. The breakdown of the first wave top at 0.8910 has already happened, which strengthens the downward movement.
Signal:
Short-term prospects for the AUDCAD pair are to sell.
The target is at the level of 0.8795.
Part of the profit should be fixed near the level of 0.8835.
The stop-loss is at the level of 0.8925.
"Bearish" trend has a short-term character, so the volume of trade should not exceed 2% of your balance.
This content is for informational purposes only and is not intended to be investing advice.
