AUD/CAD Forecast Today 23/5: Strong Against CAD (Video)
Date
5/23/2024 2:51:47 PM
(MENAFN- Daily Forex)
The Aussie dollar initially tried to rally a little bit during the trading session on Wednesday, but then turned around to show signs of weakness again. By doing so, we are testing the area right around the 0.9070 level and could possibly even drop as low as 0.90.
Recent Action Suggest Further Strength
We have recently broken above a couple of minor resistance barriers, so I do think that we have a certain amount of upward momentum that eventually has to be dealt with. In the short term, it looks like we consolidate a bit in order to work off some of the froth, and that's not a huge surprise considering both of these currencies are heavily influenced by commodities , and therefore it's kind of a push pull type of argument in general. This is a pair that does tend to be very choppy because there are very similar influences on each currency, so therefore it's not as clear of a shot as something like the British pound against the Japanese yen, for example. Because of this, you will need to be a bit more patient with a move in this AUD/CAD market.
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There's no real easy path, unless of course, you have metals outperforming energy, for example, the Australian dollar is also highly sensitive to Asia. So, keep that in mind. Canada has the backing of the United States as far as economic demand is concerned. So, there are a lot of crosscurrents at the moment. Nonetheless, we are in an uptrend, and that means that buying the dip continues to be the most obvious trade here.
I think given enough time, we will see that play out underneath. We have the 50 day EMA near the 0.8975 level, which is rising. I think that does offer a significant amount of support above. If we can break above the 0.9150 level, then I think we will see a little bit more upward momentum, perhaps trying to get to the 0.93 level over the longer term.
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