The barrage of negative news about Australia continues, with the RBA minutes commenting that the country’s outlook has ‘significant uncertainties’ and shows risks of ‘marked slowing’ in dwelling investment in one to two years’ time. The House Price Index chimed in tune with the RBA comments, declining not only by more than expected but also for a fourth consecutive quarter. The decline, which started off with a modest 0.7% q/q drop in 2018Q1 ended the year with a whopping 2.4% q/q decline, despite consensus forecasts hoping for better news.
This, along with increasing Oil prices and hopes of more government spending as the Canadian federal budget is to be published later today, pushed the AUDCAD lower, breaking through its 200HMA at 0.9445 earlier today. The pair appears to have been retracing in the last few candles, not being able to sustain its gains below the 0.9423 (Fib. 38.2%) level, moving back up to the 0.9445 Resistance level.
Indicators are showing mixed signals: the MACD points to the downside, possibly suggesting that the last two candles were just parts of a correction. In contrast, the Stochastics are issuing bullish signals as the oscillator has not crossed the 20 mark yet. The RSI is showing no clear signal as it has just crossed the 30 mark. Finally, the price of Oil is also showing some signs of weakening aiding the pair’s downwards trend, however, indicators suggest that this could likely be a slowdown in the trend.
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Dr Nektarios Michail
Market Analyst
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