AUDCAD is declining moderately on Friday, after reaching an annual high of 0.9175 in the middle of the week. The pair's recent growth has been largely driven by the decline in the Canadian Dollar Index, which has fallen 3.36% since the beginning of the year. This decline is due to the Bank of Canada's decision to begin easing monetary policy in June.
At a conference in Ottawa on Thursday, the Bank of Canada's Deputy Governor Sharon Kozicki reiterated the central bank's intention to continue lowering interest rates if inflation keeps falling.
The Canadian Dollar is also the dominant currency pair in today's bearish session, as it is correlated to the price of oil. The cost of the energy carrier is rising moderately due to the assurances of OPEC+ in maintaining low production levels to keep prices under control. The organization maintained its annual forecast for demand growth, citing an improved outlook following a potential cut in global interest rates. This supported oil prices and consequently the Canadian dollar.
Meanwhile, the Australian dollar may find support from a Reuters poll of 43 economists. According to the poll, the Reserve Bank of Australia may leave current interest rates unchanged in June. About 90% of economists expect interest rates to remain stable next quarter, with a possible 25 basis point cut by the end of 2024.
The price of AUDCAD appears to be forming a bullish corrective trend on the D1 time frame.
The price is approaching the local support, and may reverse in the direction of the trend, as the Stochastic Oscillator (standard values) indicator shows the pair oversold on the H4 timeframe.
Signal:
Short-term prospects for AUDCAD suggest buying.
The target is at the level of 0.9270.
Part of the profit should be taken near the level of 0.9175.
A stop-loss could be placed at the level of 0.9000.
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.
