Due to the correction AUDCAD could rise

08 December 2023 107
Due to the correction AUDCAD could rise

The AUDCAD currency pair is moderately rising on Friday as the Canadian currency is declining after the announcement of the interest rate decision by the central bank of Canada on Wednesday.

 

At its latest meeting, the Bank of Canada left the key interest rate unchanged at 5% per annum, which is the highest level since 2001. The decision is in line with market expectations.

 

This is the third consecutive meeting in which the central bank of Canada didn’t change the rate. The regulator sees signs of easing inflationary pressures due to previous monetary tightening measures. Nevertheless, the bank's management staff is still concerned about possible risks of accelerating inflation in the future and is ready to raise rates if necessary.

 

The bank noted that economic growth slowed in mid 2023, and higher rates limit spending.

It should be noted that the Canadian central bank has already raised borrowing costs ten times since March 2022, by a total of 4.75 percentage points. The rate was also raised by 0.25 percentage points at the last two meetings in June and July this year.

 

Meanwhile, Australia's trade surplus narrowed to 7.129 million in October compared to an expected 7.500 million and the previous figure of 6.786 million, according to the latest foreign trade data released by the Australian Bureau of Statistics this Thursday.

 

Further details of the report indicate that Australia's exports of goods and services increased by 0.4% in October compared to the previous month, where there was a 1.0% decline. At the same time, imports of goods and services decreased 1.9% in October, compared to an 8.0% increase a month earlier. The increase in exports supports the Australian currency.

 

AUDCAD quotes are in a narrow correction on the H4 timeframe.

 

In terms of wave analysis, the price is forming the third ascending wave on the H2 timeframe. Breaking through the top of the first wave at 0.9040 will strengthen the upward movement.

 

Signal:

The short-term outlook for the AUDCAD pair is to buy.

The target is at the level of 0.9200.

Part of the profit should be fixed near the level of 0.9040.

A Stop-loss should be placed at the level of 0.8860.

 

The bullish trend is of a short-term nature, so it is suggested to limit the trading volume to no more than 2% of your capital.

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

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