Technical Sentiment: Bullish
Key Takeaways
- AUD Cash Rate remains at 2.50%;
- Canadian Trade Balance comes out at 0.1B, below the 0.4B forecast;
- AUD/CAD eyes 1.0255 next.
AUD/CAD declined in the last three weeks, forming a clear bearish configuration of lower highs and lower lows. Even the Daily uptrend has shown weakness when AUD/CAD managed to temporarily dip below 1.0150, forming a lower low before recovering above the support. Right now the pair is either correcting the recent bearish move or the uptrend is taking over; it all depends on how far up the pair goes.
Technical Analysis
During the European session, AUD/CAD rallied from the 1.0150 (higher low) support all the way up to 1.0217 (higher high). This puts the bearish move on hold for now and brings up the possibility of a bullish correction.
The first resistance is around 1.0230, where the 50% Fibonacci retracement is backed up the 200 Simple Moving Average on the 4H. The secondary resistance is another confluence, priced at 1.0255, between 61.8% Fibonacci Retracement and April’s price pivot zone.
If the pair will eventually rally above 1.0255, where the correction should be capped, the uptrend will continue all the way up to the tops at 1.0340.
The main support is 1.0150, also backed up by the 50-Day Moving Average. Below this level AUD/CAD immediately switches to a negative bias and enters bearish territory.
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Prepared by Alexandru Z., Chief Currency Strategist at Capital Trust Markets
