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AUD/CAD – 9400 is a Key Hold
For the better part of the past year 9400 has acted a rock solid support for AUD/CAD pair, but with Aussie slipping to 6 year lows this week the pair could finally break that key level. Last night the Aussie saw a mild bounce after the labor data came in better than expected, but despite beating market forecasts on all fronts the Aussie could not hold its rally highs.
The reason for its weakness is the nagging belief that its just a matter of time that economy turns weaker and RBA will be forced to cut rates once again. Indeed some analysts predict that the AU rates will fall to 1.5% by the end of the year.
In the meantime the loonie has also been under attack due to ever weakening oil prices, but crude appears to have stabilized at $50/bbl and the Canadian economy is less vulnerable to it price swings. Tomorrow’s Canadian labor data, if it prints positive could be the catalyst that breaks the AUD/CAD 9400 level as markets begin to favor loonie at the expense of the Aussie.