The Australian dollar initially rose against the Canadian dollar on Friday but turned things around quickly as we saw a bit of a surprise with the Canadian jobs report.
AUD/CAD
The Australian dollar initially tried to rally against the Canadian dollar during the trading session on Friday but gave back gains as the Canadians added 75,100 jobs instead of the anticipated 17,800. Unemployment in Canada is at 6.4% instead of the 6.5% expected. That being said, we have been range-bound for a while, and a couple of days ago I told you here at Daily Forex that I was watching this for a range play. The fundamentals have come in to help that situation, and it is more of the same as we hang around the 50-day EMA.
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Looking at this pair though, one thing that you probably should think about if you look at history is that the Canadian employment numbers tend to be wildly overstated at times as well as understated. So, this could turn right back around in a month as far as the jobs component.
Stochastic Crossover and Range Targets
Nonetheless, the stochastic oscillator crossed a couple of days ago just at the overbought condition, and now we find ourselves in the middle of this range. If momentum continues to the downside, especially if oil gets a bit of a spike, you could see this pair test the 0.9750 level for support again. On the other hand, if we turn around and see oil collapse, it's possible that the Aussie continues to strengthen.
This has been a fairly tight range since the beginning of April, and we have spent the entire summer just simply going back and forth. Ultimately, this is a pair that I'm very neutral on, but it's got a well-defined range, and therefore, it is worth paying attention to as it can offer so many opportunities if you are patient enough.
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