Today, there has been a favorable appreciation of the Canadian dollar due to better-than-expected inflation data from Canada. It was anticipated that the inflation rate would increase from 2.8% to 3%, but it surprised the market by rising to 3.3%. This increases the likelihood of the Bank of Canada continuing its interest rate hike cycle, leading to higher demand for CAD and, consequently, an expected short-term appreciation.
On the other hand, I am bearish on the Australian dollar, as it has been the weakest currency today following the Reserve Bank of Australia's meeting.
Technically, it is worth analyzing the AUDCAD price, which has been in a downtrend in recent days. Today, after the Canadian inflation news, the price broke a flag pattern, providing a signal to go short on AUDCAD. This confirms the idea that it is a good opportunity to favor the Canadian dollar and go against the Australian dollar. Additionally, it can be observed at the bottom of the chart that volume has significantly increased after the news, indicating market significance and a higher likelihood of the price continuing to decline.
The trade was opened at 0.87218, with a stop loss placed at 0.8748, risking a 1% loss of the account. If the price reaches 0.8695, the stop loss will be adjusted to the entry level to ensure no losses occur. The target for this trade has been set at 0.86766.
On the other hand, I am bearish on the Australian dollar, as it has been the weakest currency today following the Reserve Bank of Australia's meeting.
Technically, it is worth analyzing the AUDCAD price, which has been in a downtrend in recent days. Today, after the Canadian inflation news, the price broke a flag pattern, providing a signal to go short on AUDCAD. This confirms the idea that it is a good opportunity to favor the Canadian dollar and go against the Australian dollar. Additionally, it can be observed at the bottom of the chart that volume has significantly increased after the news, indicating market significance and a higher likelihood of the price continuing to decline.
The trade was opened at 0.87218, with a stop loss placed at 0.8748, risking a 1% loss of the account. If the price reaches 0.8695, the stop loss will be adjusted to the entry level to ensure no losses occur. The target for this trade has been set at 0.86766.