AUD/CAD traded higher yesterday, breaking above 0.9050, which is the upper bound of the sideways that contained most of the price action since August 1st. The rally also brought the rate above the downside resistance line drawn from the high of April 17th, as well as above the 0.9065 zone, marked by the highs of July 31st and August 1st. So, having all these technical sighs in mind, we would consider the near-term picture to have turned positive.
If the bulls are willing to stay in the driver’s seat, we would expect them to aim for the 0.9095 level soon, defined by the high of July 30th. That said, in order to get confident on larger advances, we would like to see a decisive break above the peak of the day before, at around 0.9105. Such a break may pave the way towards the 0.9140 zone, the break of which could carry extensions towards the 0.9175 barrier, which is near the high of July 25th, and fractionally below the inside swing low of July 22nd.
Taking a look at our short-term oscillators, we see that the RSI moved higher and now appears ready to push above its 70 line, while the MACD lies above both its zero and trigger lines, pointing up as well. These indicators detect accelerating upside speed and support the case for some further near-term advances, at least towards the 0.9095 and 0.9105 levels.
On the downside, we would like to see a clear retreat back below 0.9005 before we abandon the bullish view. Such a move may confirm the rate’s return back within the aforementioned range, as well as below the downside line drawn from the high of April 17th. We may then see declines towards the low of September 4th, at 0.8982, or the inside swing highs of August 30th and September 2nd, at around 0.8970. If the bears are not willing to stop there either, then a move lower may allow them to put the 0.8920 zone on their radars. That zone acted as the lower end of the pre-discussed range that was in place since August 1st.
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