After failing to stay above the 0.9655, AUD/CAD started drifting lower and it is now trading below a short-term tentative downside resistance line drawn from the high of September 21st. The pair is seen moving closer to one of its key support areas, at 0.9391, marked by the lowest point of September. However, in order to get a bit more comfortable with lower levels, a break of that support area would be needed. Until then, we will take a cautiously-bearish approach.
Eventually, if we do see a drop below the 0.9391 zone, that would confirm a forthcoming lower low and may clear the path towards the 0.9348 territory, marked by the lows of June 25th and July 1st. Around there the pair might also test the 200-day EMA, which could provide additional support. If so, AUD/CAD may retrace back up a bit, however, if it stays below the 0.9391 barrier, another round of selling could be possible. If this time the 0.9348 obstacle and the 200-day EMA surrender, a further move lower might bring the rate to the next potential support area between the 0.9270 and 0.9280 levels. Those levels mark the lows of June 15th and 21st respectively.
The RSI and the MACD are both currently pointing lower. In addition to that, the RSI is below 50 and the MACD is below zero and its trigger line. The two oscillators show increasing downside price momentum, which comes in line with the idea discussed above.
Alternatively, if the pair is able to break above the previously-mentioned downside line and then climb above the 0.9500 hurdle, marked near the inside swing low of October 2nd and the high of October 9th, that might open the door for a move towards higher areas. AUD/CAD may rise to the 0.9550 obstacle, or even the 0.9583 hurdle, marked by the high of September 30th, where the rate could stall for a bit. That said, if the buyers are still feeling comfortable, a further push north might help AUD/CAD to drift to the 0.9655 level, marked near the highs of August 31st, September 15th and 21st.
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.
CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 84.25% of retail investor accounts lose money when trading CFDs with the Company. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. Please read the full Risk Disclosure.
Copyright 2020 JFD Group Ltd.