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A to Z Academy / Forex

AUDCAD: Exchange Rate, Conversion, Chart and Forecast

December 07, 2021 15:32 PM

The AUDCAD currency pair, which opposes the Australian Dollar against the Canadian Dollar, is a currency pair that has some definite differences and advantages over the major currency pairs in Forex. In this analysis, we will focus on the specifics and strengths of the AUD to CAD pair. We will also look at its historical development. Then, we will also perform a technical analysis to determine if it is the right time to buy AUDCAD.

We will also look at the medium and long-term AUDCAD forecast. For short-term AUD/CAD trading, we will provide you with essential tips to get you started in the best possible conditions. Finally, we will introduce you to an online broker that we consider the best for trading AUDCAD.  

What is AUDCAD? Overview 

Since it does not contain the Euro or the Dollar, the AUD vs CAD pair is a cross-currency pair. You may also hear the AUDCAD pair referred to as a minor currency pair.

The AUDCAD exchange rate indicates the value of one Australian Dollar in Canadian dollars. In other words, the AUDCAD exchange rate indicates the amount of Canadian dollars needed to buy one Australian Dollar.   Therefore, when analysing the AUDCAD pair, it is essential to look at the Australian Dollar and the Canadian Dollar. Consequently, it will be crucial to stay informed about the economic situation in Australia and Canada and the policy direction of their respective central banks, a point we will come back to in more detail later in this guide. 

AUDCAD Trading Characteristics

It is worth noting that the AUDCAD currency pair has far less liquidity than the major currency pairs. However, while lack of liquidity is often synonymous with high volatility, this is not the case for AUDCAD. In fact, it has been one of the least volatile currency pairs in Forex over the past few years, according to the data we have seen.

This makes AUDCAD a good choice for beginners, who will minimize the financial impact of trading mistakes with AUDCAD.  It is also important to note that AUDCAD trading is mainly short-term, as it is for all Forex currency pairs. Traders should also know that AUDCAD pip value is 7.83$ for a standard lot.

Finally, traders who wish to begin trading AUDCAD will need to open an account with an online broker. Opening an account will give you access to a platform that will allow them to access real-time AUDCAD quotes and charts and place trading orders.

Note that we will show you in detail later in this guide how to open an account with an online broker quickly and easily to start trading AUDCAD today. 

AUDCAD Chart 

Below, you will view the AUDCAD chart of the exchange rate evolution in real-time.

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How to Read the AUDCAD chart 

Before we begin to analyze the historical evolution and current situation of the AUD to CAD exchange rate, it is essential to point out that the charts on this currency pair and Forex in general work slightly different from what we are used to stocks, for example.

Indeed, all European stocks are quoted in Euros, and all US stocks are quoted in dollars. However, in the currency market, it is always the value of one currency in another currency. Thus, the currency of quotation changes from one pair to another. 

In the case of AUDCAD, this is the Australian Dollar rate expressed in Canadian dollars. It is used to convert AUD to CAD. If one wishes to convert CAD to AUD, one will need to consult the CAD AUD exchange rate, which is not a tradable currency pair at most brokers. It will show you the price of 1 CAD to AUD.

Finally, traders should note that there are several different types of charts. However, the vast majority of traders in all markets use Japanese candlestick charts exclusively. It is also possible to display AUDCAD charts with different time horizons depending on whether you want to trade in the very short term over the next few minutes or in the slightly longer term over the next few hours or days. 

AUDCAD Historical Data 

We will dedicate this section to studying the evolution of the AUDCAD exchange rate throughout its history. We will first look at the major phases of its evolution since the 2000s. Then we will look at what technical analysis can tell us about the AUDCAD's shorter-term charting history. 

AUDCAD Exchange Rate History 

The first thing that strikes you when studying a long-term chart of AUDCAD, for example, a monthly chart, is that the underlying very long-term trend is neutral.

Over its history, the AUDCAD has oscillated in a sideways trend around a pivot point located around 0.9000.  The highest exchange rate AUDCAD ever reached was recorded in December 1996 at 1.1124. The all-time low for AUDCAD was 0.7160 in October 2008.

This very long-term neutral trend indicates that it is better to approach AUDCAD trading in the short term rather than as a multi-year investment. This is because AUDCAD traders benefit most from the day-to-day and even hour-to-hour fluctuations in the pair. 

AUDCAD Exchange Rate Today

Taking a shorter-term look at the AUDCAD, we can see that the trend has been downward since January 2012.  A study of the weekly chart of the AUDCAD exchange rate shows a clearly visible downward trend line. However, traders should note that AUDCAD is currently close to the significant psychological threshold of 0.9000, which is also its very long-term pivot point.

Thus, the fall may be over, and AUDCAD could be preparing to go back up.  However, it is essential to note that this does not matter to AUDCAD traders. This is because AUDCAD investing allow you to bet on the upside as on the downside as easily. This is also the case for all other currency pairs.  Therefore, traders can make just as much money on a downtrend in the AUDCAD as on an uptrend.  

What Influences AUDCAD Exchange Rate?  

Now that we have studied the current context of the AUDCAD exchange rate and its historical evolution, it is time to teach you how to predict its future evolution. To do this, it is first necessary to understand the economic mechanisms and events that can influence the AUD to CAD exchange rate. This is what we are going to study in this section.

Central Bank Monetary Policy  

Since central banks control the money supply through interest rate setting and asset purchases, they are the most influential players in the currency market. In the case of AUDCAD, it is therefore imperative to follow the monetary policy of the Australian Central Bank, the RBA, and the Canadian Central Bank, the BOC. Specifically, it will be necessary to determine which of the two central banks has the more hawkish or dovish stance.

A hawkish monetary policy is based on high rates and low asset purchases. Conversely, a monetary policy involving low rates and massive asset purchases will be considered dovish. AUD USD traders should be aware that the more hawkish a central bank's monetary policy is, the more it favors its currency. Conversely, the more dovish a central bank's policy is, the more of a bearish factor it is for that currency. 

Economic Calendar  

All Forex traders, including AUDCAD traders, must follow the economic calendar each day, telling them what national statistics to expect for the following hours. In the case of AUDCAD, the focus is, of course, on Australian and Canadian statistics. The interpretation is quite simple: if a country has robust economic statistics, such as GDP or industrial production, the more it will favour the rise of its currency. Conversely, a weak economic situation will penalize the exchange rate of the currency concerned. 

Gold Price Trends 

The Australian Dollar is known for its correlation with the price of gold. This is because Australia is a major gold-producing country. Thus, investors and buyers from all over the world must pay Australian producers in Australian dollars. This ensures that the Australian Dollar has a certain level of demand. This also implies that rising gold prices are a bullish factor for AUDCAD while falling prices will be a bearish factor. AUDCAD traders should therefore keep a close eye on the price of gold. 

Oil Price Trends  

The Canadian Dollar is correlated to the price of oil as Canada is an oil-producing country. Thus, when oil rises, the exchange rate of the Canadian Dollar will tend to rise as well. Conversely, bearish markets in oil will be considered bearish factors for the CAD. Therefore, any AUDCAD trader needs to stay informed of the trend in the price of a barrel of oil at all times. 

AUDCAD Forecast and Predictions 

In this section, we will discuss medium to long-term AUD to CAD forecast. However, it is essential to note from the outset that AUDCAD trading is best suited for short-term investments.

From the long-term evolution of the AUDCAD, we have seen that investment over several years would have given unsatisfactory results. On the other hand, for short-term trading, AUDCAD can be expected to make significant gains daily.  However, if you are interested in the long-term direction of the AUDCAD, we have been able to find a few predictions for end of 2022 that we have put together below:

  • Wallet Investor : 0.9220 
  • Panda Forecast : 0.8880 

Why Trade AUDCAD Today? 

Volatility:  Over the past 2 years, the average daily volatility of the AUDCAD has been one of the lowest in the entire forex market. This is a critical point for novice traders, as they will suffer less loss if they make a mistake with AUD to CAD than with more volatile currency pairs.  

Proxy for investing  in the price of gold: We explained earlier that the Australian Dollar is correlated to the gold price. Therefore, trading AUDCAD can also be seen as a way to bet on gold's price indirectly. 

Proxy for investing in the price of oil:  Similarly, the AUDCAD correlation with the oil price make it an exciting way to develop investment strategies that take into account changes in the price of black gold. 

There are few economic indicators to watch: Relatively few Australian and Canadian economic statistics are released each week. This reduces the risk of a good or bad surprise in the economic indicators causing volatility spikes. 

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Where Can I Invest in the AUDCAD Pair?  

It is sometimes difficult to choose an online broker as there are so many. That's why we've reviewed many of them to determine which is the best one to trade AUD to CAD. And the name that came up most often was the broker ZFX.

ZFX provides its clients with the MT4 trading platform, which is the most widely used globally thanks to its many technical analysis and automated trading advantages. 

Also, as you can see by yourself with a demo account, the spread for AUDCAD is usually lower than 3 pip. Finally, it is worth noting that ZFX offers its clients to trade stocks, indices, forex and commodities. 

How to Trade AUDCAD Now 

Trading AUDCAD through the broker ZFX is very simple and fast. Indeed, you can open an account entirely online, and it takes only a few minutes. All you have to do is follow these steps: 

  • 1 - Register with ZFX 
  • 2 - Verify your ZFX account 
  • 3 - Make your first deposit 
  • 4 – Trade AUDCAD 

Let's go through each of these steps in detail. 

1 - Register with ZFX 

For this first step, you will need to go to the ZFX broker's website, and click on the "Open an account" button. You will then have to fill in a registration form with several personal details, including your phone number, which will be verified by SMS. 

Trade Walmart - Step 1

After filling out the form, click on the "next" button at the bottom of the page. 

AUDCAD | Live AUD to CAD Rate, Chart, Forecast

Immediately after this step, ZFX will display your MT4 login and password, and invite you to download the platform. MT4 Login to trade AUDCAD

2 - Make your first deposit 

To do this, click on the "make a deposit" button on the screen displayed immediately after registration. You will then need to choose a payment method. Let's take Mastercard as an example: 

trade Facebook stock with ZFX - Step 3

On this screen, indicate the deposit amount and then click on the "Confirm Deposit" button. You will then need to provide for your credit card information before the final validation of the payment. 

3 - Account verification 

Finally, proceed with the account verification by sending supporting documents. 

trade Facebook shares with ZFX - Step 4

As shown in the image above, you will need to upload the documents directly to the ZFX website. Once your documents are validated, you will then be ready to trade AUDCAD. 

Tips for AUDCAD Beginner Traders 

This section will share the tips that we consider most essential to get started in AUDCAD trading in ideal conditions. 

Learn AUDCAD Technical Analysis  

AUD/CAD trading is primarily a short-term investment. However, technical analysis is the primary tool to make trading decisions when it comes to short-term investments. Therefore, you must take the time to learn the basics of technical analysis before you start trading AUDCAD. Skills needed includes knowing how to analyse charts and how to use trend lines and supports and resistances. You will also need to master a few economic indicators, such as the MACD or RSI. 

Finding good sources of AUDCAD information  

As AUDCAD is a fairly thinly traded currency pair, you will be hard-pressed to find AUDCAD news or AUDCAD analysis. However, it will be essential to keep yourself informed of several things. Things to watch include looking at Australian and Canadian economic indicators. It also involves keeping track of the price of gold and oil since the price of these two commodities can influence AUDCAD.

Practice AUDCAD trading with a demo account  

Brokers, including ZFX, offer to test their trading platform with a demo account. Not only does this allow you to verify that the broker's platform is performing well, but it also gives you an ideal opportunity to practice trading without any risk of losing money. After learning the basics of technical analysis, it is therefore essential to take the time to practice applying the knowledge gained on a demo account with virtual capital. Once you have achieved satisfactory results, you can then trade AUD/CAD with real money. 

Choose a serious broker  

Finally, it is crucial to choose a serious broker. The first step is to choose a regulated broker. You will also need to check that the broker's platform meets your needs and offers all the necessary functions to perform complex technical analyses. You will also need to look at the fees, in this case, the AUD to CAD spread. 

Bottom Line: Is AUDCAD a Good Investment Now? 

AUDCAD is far from being one of the most popular currency pairs in Forex. However, we have seen in this guide that this does not take away from its advantages. In particular, AUDCAD is a fairly low volatility currency pair that will allow novice traders to limit the risk of loss should they make a mistake. AUDCAD also has the distinction of being a currency pair that the price of gold or oil can influence.

If you think that AUDCAD may be the right currency pair for you and want to start trading AUDCAD today, we invite you to learn more about the online broker ZFX without delay. Our research for this guide has concluded that this is the best broker for trading AUDCAD. We particularly like the performance of its MT4 platform and its very low AUDCAD spread.

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