AUDCAD is strengthening due to data from China and RBA statement

09 August 2024 134
Alexandra_Belova
Alexandra_Belova

Listed among the best MarketCheese authors
1st in the segments "Currencies" and "Oil and gas"
AUDCAD is strengthening due to data from China and RBA statement


The AUDCAD currency pair is moderately rising on Friday amid positive inflation data released in China. In addition, the pair strengthened after hawkish comments of the Reserve Bank of Australia (RBA) Governor Michelle Bullock on Thursday. According to her, the central bank's board of directors is considering raising the interest rate from 4.35% to 4.6% because of ongoing concerns about excess demand in the economy.


China's consumer price index increased by 0.5% year-on-year in July, higher than expectations of 0.3% and the previous 0.2%. Meanwhile, the monthly index also rose by 0.5%, revised from the previous decline of 0.2%. Any changes in China's economy affect Australian markets as both countries are close trading partners.


Meanwhile, Canadian markets are awaiting the employment data release, which may influence the Bank of Canada's next interest rate decision. According to Statistics Canada, Friday's labor market report for July is projected to show an increase in employment of 22,500, with the unemployment rate rising from 6.4% to 6.5%.


Market participants believe that the Bank of Canada will cut the core interest rate again at its next meeting on September 4, after lowering it to 4.50% last month. This puts pressure on the Canadian currency.


Technical analysis of the AUDCAD currency pair indicates an exit from the downtrend on the H4 timeframe. The Moving Average of Oscillator indicator volumes (with parameters of 12, 26, 9) show an increase, pointing to a change of trend and the pair's growth.


Short-term prospects for the AUDCAD currency pair suggest buying, with the target at the level of 0.9170. Part of the profit should be taken near the level of 0.9110. A Stop loss could be set at 0.8970.


Since the bullish trend is short-term, the trading volume should not exceed 2% of your total balance to reduce risks.

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

error
More
Alexandra_Belova
Alexandra_Belova

Listed among the best MarketCheese authors
1st in the segments "Currencies" and "Oil and gas"
Comments
New Popular
Send
Commenting rules