AUD/CAD looks ready to resume its uptrend and move past its recent highs, based on this Elliott Wave analysis on the daily time frame. As you can see, price already made a bounce off the 38.2% Fibonacci retracement level from a year back and is currently consolidating.
An upside break from consolidation, possibly sparked by strong Australian data or weak Canadian reports, might lead to a rally up to the previous highs near the 1.0400 major psychological level.
Elliott Wave Analysis and Forecast
In terms of latest economic data though, both Australia and Canada have failed to impress, which explains the tight consolidation for the AUD/CAD currency pair. It appears though that signs of an economic rebound in China might provide a bit more support to the Australian dollar. However, optimism from the US Federal Reserve when it comes to the US economic progress might carry over to Canada and the Loonie.
A breakout in either direction could seal the near term movement for the pair, but it seems that the odds are still to the upside since AUD/CAD is in a strong uptrend. Elliott Wave analysis shows that it is in the middle of completing another impulse wave, after finishing off a recent correction leg.
There could be a chance though that another quick pullback might be in the cards if Australian data continues to disappoint. If that happens, the 38.2% Fib level might still hold as support for any possibly downward price moves.
The Fibonacci extension levels marked on the chart show potential areas for taking profit in case the pair keeps rallying and breaks above the previous highs. The 61.8% Fibonacci extension level lines up with the 1.0600 major psychological handle, another potential resistance if AUD/CAD keeps climbing.
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