Oversold positions on AUDCAD may create conditions for price growth to 0.8920

19 April 2024 102
Oversold positions on AUDCAD may create conditions for price growth to 0.8920

The AUDCAD currency pair shows growth on Friday after a strong decline the previous day. The price drop registered yesterday was due to the publication of data on the Australian labor market and the strengthening and expansion of geopolitical tensions in the Middle East. Escalating Iran-Israel relations became the center of attention following reports of bombings in Iran. This led to an increase in demand for safe-haven assets, which does not include the Australian dollar, in light of rising tensions in the Middle East. 


Australian employment fell in March after a significant gain in the month before, while the unemployment rate started to rise again. This indicates that the labor market is still under pressure, albeit with less intensity.


Investors who expected the Reserve Bank of Australia to cut interest rates this year are still confident of hitting their highs. However, market expectations for monetary policy easing are still far.


Meanwhile, the Canadian dollar continues to trade without significant fluctuations amid a lack of macroeconomic news this week in Canada. The country's government's plans to raise taxes on the savings of wealthy individuals and corporations will likely limit investment. This could exacerbate the productivity problems that have hampered economic growth in recent years and be a catalyst for a decline in the value of the Canadian dollar.


At the technical level, AUDCAD quotes are in an expanding correctional corridor on the H4 timeframe. The price is pulling back to the major support, aiming at the trend resistance.


The curve of the Relative Strength Index (RSI) indicator on the H1 time frame has left the oversold zone, which signals a potential increase in the value of this currency pair. 


Signal:

The short-term outlook for AUDCAD is to buy.

The target is at the level of 0.8920.

Part of the profit should be taken near the level of 0.8870.

A stop-loss could be placed at the level of 0.8740.

 

The bullish trend is short-term, so trade volume should not exceed 2% of your balance.

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

error
More
Comments
New Popular
Send
Commenting rules