SHORT AUDCAD
Luca Santos
AUDCAD·
Jun 13 2025
Pending
Published 8d ago
0.88563
Current price
0.88238
Entry price
Side: Short
Entry: 0.88238
Take Profit (TP): 0.87505
Stop Loss (SL): 0.88545
Risk Reward (RR): 1 to 2.39
Reason Behind the Trade Idea:
The Israeli strike on Iranian military and nuclear infrastructure has triggered a surge in geopolitical risk across the Middle East. This event is not just a one-off flare-up it raises the possibility of a broader regional escalation involving global powers, which is causing global risk sentiment to deteriorate sharply.
In that environment, investors rotate out of risk-sensitive currencies like the Australian dollar (AUD) and into relatively safer or commodity-supported currencies like the Canadian dollar (CAD). The sharp rally in crude oil due to fears of supply disruption from the region further boosts CAD as Canada is a major energy exporter.
Fundamental Drivers:
- Geopolitical Shock: The Israeli offensive on Iran’s nuclear sites marks a significant escalation and is not expected to be short-lived. Iran’s potential retaliation could lead to higher oil prices, closed airspaces, and broader market instability.
- Risk Sentiment: AUD is typically sold off in global uncertainty due to its close ties with Chinese growth and commodities that are sensitive to global demand.
- Oil Surge & CAD Strength: Brent and WTI crude have surged over 5–6% in response to the strikes. This strengthens the Canadian dollar as oil exports are a major part of Canada’s trade balance and GDP.
- Flight to Quality Rotation: Markets are unwinding risk-on trades, favoring currencies like CAD that are backed by hard assets and less exposed to global trade disruptions.