The Loonie hit multi-year lows against the USD on the back of terrible numbers and hints from the BoC at easing (which is still far from impending at the moment). The Aussie has showed some strength this week but RBA governor Glenn Stevens wants it in the low 80's versus the USD (at .91xx as of now). Which currency is set to be weaker? I'm not sure.
What I am sure of is that convergence/divergence is a simple, straight forward, and often correct trading tool with the proper levels and awareness of forthcoming major events.
C/D suggests the audcad has some upward room to run. But I'd be very careful with a cross like this one. If you want to get into it watch China as the Aussie depends on it; watch the USD because...well...Canada.
Good luck.
Comments
ForceFollower
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As long as the high of 0.9747 remains intact (with no close above it, at least on H4), the odds seem to be against the AUD and favor the CAD. But you're right it's hard to tell now. Both currencies are weak and the recent strengthening of the aussie doesn't tell much yet.