Overview: Since the beginning of October. The AUD/CAD currency pair has been trading upwards with a rising wedge pattern. Easing coronavirus restrictions may continue to underpin AUD. Better-than-expected economic data may sway the RBA to retain its wait-and-see approach in the near term. Deteriorating Australia-China relations may undermine the nation’s economic recovery. The Australian Dollar looks set to extend its push to fresh yearly highs.
These positive developments may diminish the probability that the Reserve Bank of Australia will adjust its monetary policy settings in the near term. Therefore, Australia’s progressive return to normalcy looks set to fuel a swifter rebound in economic activity and may sway the RBA to keep its monetary policy settings steady in the medium term, opening the door for the local currency to continue moving higher against its haven-associated counterparts. Nevertheless, with iron ore seemingly safe for the time-being, AUD may continue to benefit from the historic surge in the price of the metallic rock and consistent Chinese demand.
Market Analysis: We can conclude from the above discussion that technically market shows its higher faces. The market is rising higher and traveling towards the upside momentum. Positive volatility is being created in the market. The pair shows the little signs of abating spreads to continue the move towards in the favors. Alongside this, with the cross also a China (AUD) vs US (CAD) sentiment proxy, with the US lagging China in the COVID timeline given that the US is currently experiencing a second wave of virus cases, AUD/CAD has the grounds to keep pushing higher.
On the daily chart, the market is saying that the pair is trading in an upward trend and the indicator is also supporting the indicator. The RSI is above the 50 levels and creating a sign of bullishness in the market. The MACD will create buy signals in the market. On the 4 hourly chart, the market follows the same trend so we hope it will give profit to the buyers.
Trade Idea: Based on the chart and studies above we would suggest to traders and investors that go for buy at 0.9550 targets is 0.9620 and 0.9700 stop loss is 0.9480 level.
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