A New Perspective on AUDCAD

Great changes are coming to this world. It has already started preparing for a new crisis trying to roll up pants and keep them dry. AUDCAD is not an exception here, so we will try to earn on it now.

Basic arguments

A massive amount of data, possible changes in the monetary policy as well as bank financial statements will increase the demand for the pair and will move the volatility.

A narrow gap between the interest rates of AUD and CAD assumes a slow but consistent lowering of AUD against CAD. It means that generally, the downward trend is quite natural now for this currency pair.

Also, here we have a special upcoming event: the decision about the AUD interest rate. We expect to get it back to 1,25%.

Technical arguments

After a long time trend, we can see a correction, which can be explained with the demand for AUD cash market instruments. However, a speculative growth has already gone beyond its limits and is ready for a correction.

An overall trend will remain downwards.

Positions of big traders

Picture 1. The price chart of AUDCAD and the chart of the indicator of big traders for the period of 18.08.2019 - 17.09.2019.

By taking a look at picture 1, we can conclude the following:

Big traders (mainly hedgers) significantly corrected their positions which pushed the prices upwards, however, at this moment there is a drawdown in positions and the price is about to correct.

The major force here is the dynamics of AUD.

Summary

Clearly, investments in such assets as AUDCAD are connected with additional risks. The overall situation indicates the continuation of the DOWNWARD movement.

Key events:

• Published minutes of the meeting regarding the monetary policy of the Bank of Australia.
• Index of CAD consumer prices
• AUD interest rate decision

Indicators:

• Bollinger Lines