AUD/CAD & AUD/USD Analyses: Australian Dollar is Performing Better than the US and Canadian Dollars

Since Canada is one of the largest oil exporters in the world, its currency is heavily dependent on the price of oil. Oil demand is decreasing due to the pandemic and with the new strain of the virus spreading so quickly and European countries closing their borders, the demand for oil is falling. The situation could get worse if the spread of this new strain gets out of hand and is located in various countries around the world, particularly the US.
The Australian dollar, unlike its CAD counterpart, is gaining ground due to the increasing demand for gold. The ailing US dollar, the new Covid-19 variance and the US economic stimulus package could induce investors to buy the precious metal. Since the Canadian dollar is dependent on oil, the Australian dollar is dependent on gold as Australia is the third largest gold producer in the world.
Both AUD / CAD and AUD / USD pairs are nearing completion of the 5th motive wave of the Elliott wave cycle, and each pair is nearing a major resistance that could halt further growth.
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AUD / USD rate on Overbit
As can be seen in the graph above, AUD / USD was stopped by the resistance at USD 0.76398. The pair has been able to recover quickly and is now trying to break the above resistance and continue the uptrend. The number of Elliott waves on the pair's daily chart suggests there should be one final momentum before the pair can make a deeper correction, and the level at which this 5th wave could end is near 0, $ 79,900 as there is strong resistance.
AUD / USD rate on Overbit
If AUD / USD does not break the resistance, it should not fall below the USD 0.74045-0.74000 levels, which is where there is EMA50 support and a previous high which is also wave 3. However, the continuation of the uptrend towards USD 0.79900 seems more realistic.
The AUD / CAD weekly chart is clearly showing where the pair could stop its impulsive bullish move, the dynamic resistance from March 23, 2013.
TradingView AUD / CAD chart
The Elliott wavenumber of this pair also suggests the end of the motif at 0.99890. The pair is back in this descending channel, so the levels of this channel play an important role in the AUD / CAD price movement.
TradingView AUD / CAD chart
Currently the pair is testing a major resistance despite RSI, MACD, MA100 and EMA50 acting as overorder the pair, which acted as support and signaled the continuation of the uptrend. If the pair does not break the current resistance at 0.97740 it may fall towards 0.96510 but never below it or the EW count will be invalidated.
Neither Australia nor Canada will be releasing any major economic data this year. The only drivers of the stability of these currencies will be developments in the US and Covid-19 statistics, including developments in the new variant of the virus. Unlike Australia and Canada, the United States will publish two major economic reports that are forecast to be positive: Pending Home Sales (MoM) for November and CB Consumer Confidence for December.
This article was originally published on FX Empire
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