AUD/CAD has been in a declining mode since Friday, while today, it managed to fall below the key support barrier of 0.8954, thereby completing a short-term “double top” formation on the 4-hour chart. In our view, this combined with the fact that the rate is trading below all three of our moving averages, suggests that there is scope for the rate to continue drifting south for a while more.
If the bears are willing to stay behind the driver’s seat and push below the 0.8925 hurdle, we may then see them aiming for the 0.8875 zone, which is marked as a support by an intraday swing high formed on October 2nd. They may decide to take a small break after testing that zone, thereby allowing the rate to rebound somewhat, but as long as it would stay bellow 0.8925, we would see decent chances for the sellers to re-enter the field. The upcoming negative leg may drive the pair below 0.8875 and perhaps extend the decline towards the low of October 2nd, at around 0.8835.
Looking at our short-term oscillators, we see that the RSI lies below 50 and points down, while the MACD stands below both its zero and trigger lines, pointing down as well. Both these indicators detect negative momentum and support the notion for this exchange rate to keep sailing south.
On the upside, a move back above 0.8954 may discard the double top and turn the outlook back to neutral. The move that could make us turn to positive is a strong break above 0.9035. Such a move would confirm a forthcoming higher high on the 4-hour chart and could initially aim for the 0.9060 zone, near the inside swing low of September 19th. If that level is not able to halt the advance either, its break may allow the bulls to put the 0.9100 territory on their radars.
JFDBANK.com - One-stop Multi-asset Experience for Trading and Investment Services
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. JFD Group, its affiliates, agents, directors, officers or employees are not liable for any damages that may be caused by individual comments or statements by JFD Group 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 Group prohibits the duplication or publication without explicit approval.
72,99% 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: https://www.jfdbank.com/en/legal/risk-disclosure
Recommended Content
Editors’ Picks
EUR/USD clings to daily gains above 1.0650
EUR/USD gained traction and turned positive on the day above 1.0650. The improvement seen in risk mood following the earlier flight to safety weighs on the US Dollar ahead of the weekend and helps the pair push higher.
GBP/USD recovers toward 1.2450 after UK Retail Sales data
GBP/USD reversed its direction and advanced to the 1.2450 area after touching a fresh multi-month low below 1.2400 in the Asian session. The positive shift seen in risk mood on easing fears over a deepening Iran-Israel conflict supports the pair.
Gold holds steady at around $2,380 following earlier spike
Gold stabilized near $2,380 after spiking above $2,400 with the immediate reaction to reports of Israel striking Iran. Meanwhile, the pullback seen in the US Treasury bond yields helps XAU/USD hold its ground.
Bitcoin Weekly Forecast: BTC post-halving rally could be partially priced in Premium
Bitcoin price shows no signs of directional bias while it holds above $60,000. The fourth BTC halving is partially priced in, according to Deutsche Bank’s research.
Week ahead – US GDP and BoJ decision on top of next week’s agenda
US GDP, core PCE and PMIs the next tests for the Dollar. Investors await BoJ for guidance about next rate hike. EU and UK PMIs, as well as Australian CPIs also on tap.