AUD/CAD dropped by around 80 pips in the last trading sessions, but it also looks like it found a floor near a key area of interest.
The pair looks ready to test whether its weeks-long uptrend still has some life in it.
Let’s zoom in on the 4-hour time frame:
AUD/CAD 4-hour Forex Chart by TradingView
Canada’s blowout jobs report lit a fire under the Canadian dollar on Friday. The numbers crushed expectations and took a lot of the dovish chatter off the Bank of Canada’s (BOC) plate, so traders rushed back into the Loonie.
But the Australian dollar is not exactly sitting in the corner. The comdoll is getting a lift from solid mid-tier data at home and from the idea that the Reserve Bank of Australia (RBA) may not sound as dovish as markets are pricing in. Both currencies have a little swagger right now, and that makes this week’s moves a lot more interesting.
Remember that directional biases and volatility conditions in market price are typically driven by fundamentals. If you haven’t yet done your homework on the Australian dollar and the Canadian dollar, then it’s time to check out the economic calendar and stay updated on daily fundamental news!
AUD/CAD has been printing higher highs and higher lows since late November, but it recently hit a ceiling around .9240 and slid to the .9160 area.
We’re keeping an eye on the area to see if it draws bullish pressure. See, it’s parked near a former resistance area from late October through early November, and now lines up with the 61.8% Fib of December’s upswing, the Pivot Point line at .9187, and the lower edge of the ascending channel on the 4-hour chart.
If we start to see green candlesticks and steady trading above the .9200 handle, AUD/CAD could make another run toward the .9240 highs or even mark new December highs.
But if red candles return and AUD/CAD holds below .9150, the pair could drift down toward .9100 to .9120 or even revisit November’s lows near .9080.
Whichever bias you end up trading, don’t forget to practice proper risk management and stay aware of top-tier catalysts that could influence overall market sentiment.
Disclaimer:
Please be aware that the technical analysis content provided herein is for informational and educational purposes only. It should not be construed as trading advice or a suggestion of any specific directional bias. Technical analysis is just one aspect of a comprehensive trading strategy. The technical setups discussed are intended to highlight potential areas of interest that other traders may be observing. Ultimately, all trading decisions, risk management strategies, and their resulting outcomes are the sole responsibility of each individual trader. Please trade responsibly.
