AUD/CAD traded higher yesterday after the BoC abandoned its hike bias, and returned briefly back above the upside line drawn from the low of March 1st. That said, it was quick to give back those gains and to return back below the upside line. In our view, the fact that the rate is trading below that line, as well as below all three of our moving averages, paints a negative near-term picture.
A clear and decisive dip below 0.9445 would confirm a forthcoming lower low on the 4-hour chart and may see scope for downside extensions towards the 0.9415 support zone, which is defined by the lows of April 2nd and 3rd, and it is also near the lows of March 19th and 20th. If that zone fails to stop the rate from drifting lower this time around, its break may allow the bears to put the 0.9390 zone on their radars. That area provided decent support back on March 6th and 14th.
Shifting attention to our short-term oscillators, we see that the RSI rebounded from near its 30 line, and it then turned flat, while the MACD, although below both its zero and trigger lines, has also turned sideways, signaling that it could bottom soon. These indicators detect slowing downside speed and thus, we will stay cautious of another corrective bounce before the next leg down, perhaps for the rate to test the 0.9480 level, or the aforementioned upside line.
That said, in order to start examining whether the bears have abandoned the battlefield, at least in the short run, we would like to see a clear break above the psychological territory of 0.9500. This would confirm the rate’s return above the upside line drawn from the low of March 1st and could allow the pair to travel towards the 0.9540 resistance, marked by the high of April 23rd. If that level fails to hold and the rate emerges above 0.9550 as well, then we could experience bullish extensions towards the high of April 19th, at around 0.9580.
Disclaimer:
The content we produce does not constitute investment advice or investment recommendation (should not be considered as such) and does not in any way constitute an invitation to acquire any financial instrument or product. The Group of Companies of JFD, its affiliates, agents, directors, officers or employees are not liable for any damages that may be caused by individual comments or statements by JFD analysts and assumes no liability with respect to the completeness and correctness of the content presented. The investor is solely responsible for the risk of his investment decisions. Accordingly, you should seek, if you consider appropriate, relevant independent professional advice on the investment considered. The analyses and comments presented do not include any consideration of your personal investment objectives, financial circumstances or needs. The content has not been prepared in accordance with the legal requirements for financial analyses and must therefore be viewed by the reader as marketing information. JFD prohibits the duplication or publication without explicit approval.
76% of the retail investor accounts lose money when trading CFDs with this provider. You should consider whether you can afford to take the high risk of losing your money. Please read the full Risk Disclosure.
Copyright 2019 JFD Group Ltd.