Aussie gets the way back?

AUDCAD, H1

The Aussie has outperformed over the last week, with a 0.6% w/w gain versus the U.S. buck, a 0.5% rise on the yen, and a 1.3% advance on the New Zealand dollar. The prices of some of Australia’s key commodity exports have extended recent gains today. The abatement in trade tensions, even if only a hiatus, and cooling in geopolitical tensions have unleashed pent up demand for commodities, and indirectly the Australian dollar.

More precisely, the Australian dollar lifted today, concomitantly with commodity prices out of post-Australian jobs data lows, subsequently posting a fresh trend high. AUDUSD had been under pressure earlier in the Sydney session following a miss in Australian employment data before turning higher, with AUDUSD rising out of its 0.7773 low to a five-week high at 0.7812.

The same performance has been seen to nearly all Aussie crosses. However, as US Session is getting closer, a backdrop of Aussie has been noticed, which seems getting weaker mainly against Greenback, yen and Canadian Dollar. The AUDCAD, spiked today just few pips below the 200-day MA, up to 0.9861, failing however to break above the 23.6% Fibonacci retracement level of the deep fall seen, since March peak at 1.0241. Hence since today’s latest high  the pair returned back lower, to the lower Bollinger Bands pattern and below all 3 Daily SMAs. In the Daily chart, significant is the fact that, the 50-Day exponential MA crossed today the 200-day MA, suggesting that negative momentum increase. However this cross needs to be confirm with today’s closing level. Hence a closing today below the midway of overnight’s rally, i.e. below 0.9795 level, should implies that AUDCAD gets selling interest again and it is likely to get back into a Down channel. Looking at momentum indicators, the RSI is standing below the threshold of 50 and is moving south, while the MACD oscillator is falling further within the the negative zone.

In short-term, AUDCAD confirms the bearish picture mentioned above. Resistance is at 0.9860 (23.6% Fib. level) , while immediate support was at recent hourly swing low at 0.9815. The latter has broke the last hour, since the pair turned sharply lower below the Daily PP level, with 3 consecutive strong bearish candles. In the hourly chart, the pair broke the 50 and 200 period eMAs, while the lower Bollinger BAnds pattern is extended into the downside, suggesting that bears are gaining the control of the asset.  The next immediate support are comes between Fractal high at the S1 level, between 0.9780 and 0.9765. Meanwhile, the RSI indicator crossed below the 50 level, while the MACD oscillator still holding above the zero line however is far below the signal line.

If the pair fails today to strengthen its positive momentum, and does not manage to close above the round 0.9800 level, then this would signal a resumption of the longer-term downtrend and the pair could touch the 0.9765 support or even lower to the 0.9735 the barrier.

Conversely, if prices rebounds then is expected to head higher, up to the immediate resistance at the 23.6% Fibonacci.

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