The AUDCAD will try once again to reach 0.8885

06 July 2023 166
The AUDCAD will try once again to reach 0.8885

Last week the AUDCAD currency pair has updated November’s low and moved to the rebound. The first target of 0.883 was reached within only 3 trading sessions, and this morning the price almost hit the next level of 0.8885. Market participants took a break and fixed some profits, but soon the AUDCAD price might resume its upward movement.


It is indicative that the Australian dollar continued to strengthen, despite the omission of the national financial regulator. The Reserve Bank of Australia on Tuesday left its key rate unchanged at 4.1%, although most analysts expected another hike of +0.25%. The initial negative reaction of the Australian dollar was fairly quickly leveled out.


Probably, traders and investors did not pay much attention to the current RBA’s interest rates pause due to the proximity of the next meeting on monetary policy. The Australian regulator holds meetings every month and thus can react to changes in economic statistics more quickly than central banks of other countries. Now the market forecast for a rate hike has just changed the date from July 4 to August 1, while all other expectations have remained the same.


Recent data on the economies of Australia and Canada also play in favor of growth in the AUDCAD price. Australia's trade surplus has surpassed the forecasts, while industry in Canada continued to slow down, failing to meet more optimistic expectations. Strong Canadian labor market statistics may change the balance of forces, but there is still enough time till Friday evening for the AUDCAD to reach 0.8885.


As long as the AUDCAD price is kept above the Fibonacci 23.6% level (0.883), the main scenario is that the price will continue growing. If it reaches the level of 0.8885, the way to the next target at 0.893 will open, but this is a more distant prospect.


The following trading strategy can be suggested:


Buy the AUDCAD at the current price. Take profit 1 — 0.8885. Take profit 2 — 0.893. Stop loss — 0.883.


Traders can also use a Trailing stop instead of a fixed Stop loss at their discretion.

This content is for informational purposes only and is not intended to be investing advice.

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