The AUDCAD currency pair is moderately falling on Friday, as the Canadian currency grows due to the correlation with the American dollar after the publication of economic data in the United States.
The US inflation figures came in higher than expected. This contradicts markets' initial forecasts for the Federal Reserve to cut interest rates in March, Reuters notes.
The US consumer price index for December rose 0.3% month-on-month and 3.4% year-on-year. Analysts polled by Reuters had forecast the index to rise by 0.2% and 3.2%, respectively. The data released on Thursday had a positive impact on the Canadian dollar.
Yesterday's publication of statistics in another part of the world also had a short-term impact on the AUDCAD pair pricing. Australia's trade balance showed a significant improvement in December, reaching a surplus of 11.437 million. This was well above the forecasts of 7.5 million and the previous figure of 7.129 million, according to the latest data from the Australian Bureau of Statistics.
The report also revealed interesting changes in the components of the trade balance for the month. Exports of goods and services from the continental state increased by 1.7% in December, compared to a 0.4% rise in the previous month. At the same time, imports of goods and services declined by 7.9% in December, a significant increase from the 1.9% fall recorded a month earlier.
Friday's reading on investment loans for house building in Australia showed a significant drop to 1.9% from the previous reading of 5.6%. This was a reason for the correction of the Australian currency.
The AUDCAD quotes are in a narrow correction range on the H4 timeframe.
In terms of wave analysis, the price is forming the second ascending wave on the H1 timeframe. The Bears Power indicator (standard values) is growing in the negative zone. This indicates a sell-side movement and the formation of a new descending wave.
The short-term prospects of the AUDCAD pair is to sell.
The target is at the level of 0.8830.
Part of the profit should be fixed near the level of 0.8900.
A Stop-loss should be placed at 0.9060.
The bearish trend is of a short-term nature, so it is suggested to limit the trading volume to no more than 2% of your capital.