The AUD/CAD has been choppy. There is no prevailing trend to speak of. Usually, when the market is relatively sideways, traders will look for key support to buy from, and key resistance to sell from. As we begin the week, AUD/CAD is approaching a falling trendline seen in the 4H chart.
The fact that price has been crossing over and under the moving averages, which are hav also be crossing each other shows that the market has no direction. The RSI has been oscillating between 30 and 70, which also shows lack of direction.
As we begin the week, price is threatening the falling speedline from the 0.9848 resistance.
Shorting this pair as price approaches the 0.9780-0.98 area would have some technical rationale, but here’s the thing. This is a falling resistance that has given the market a slight bearish bias. A break above this resistance does not mean the market is bullish, but simply says that the market is NOT bearish. In fact, to sell here around 0.9780 would require belief that the AUD/CAD should remain bearish at least in the short-term.
On the other hand a break above 0.98 means nothing outside of the near-term outlook, which would be bullish towards the 0.9860 area.
Now, let’s turn to the daily chart for some more guidance.
We see a market that is indeed slightly bearish, but has turned somewhat bullish since market a low on the year at 0.94 in late December. The technical picture in the daily chart shows some nascent bullish development.
1) Price is trying keep from going under the cluster of 200-, 100-, and 50-day SMAs.
2) The RSI tagged above 70 and has since held above 40, reflecting maintenance of the bullish momentum.
With the slight bullish outlook in the short to medium-term. We should not expect much resistance from the trendline seen in the 4H chart, except for an intra-session retreat. The technical condition supports a bullish market this week, with the target not only back to 0.9860, but with the 1.00 handle in sight as well.
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