AUD/CAD is heading for a multi-month resistance zone!
Think the pair taps the ceiling again and stalls out for another day?
Or are we seeing the early signs of an upside breakout?
AUD/CAD 4-hour Forex Chart by TradingView
Positive Australian data and the market’s relatively less dovish view of the Reserve Bank of Australia’s (RBA) bias helped lift the Australian dollar over the Canadian dollar in late November.
However, soft Chinese readings, underwhelming mid-tier Australian data, and a rebound in crude oil prices could put a cap on the Aussie’s gains against the oil-related Loonie.
Remember that directional biases and volatility conditions in market price are typically driven by fundamentals. If you haven’t yet done your fundie 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, which bounced higher from the .9075 area, is now on track to test the .9200 psychological level and the top of a range pattern that has kept the bulls in check since October.
This time, the .9200 zone also lines up with the R1 Pivot Point at .9186.
Bearish candlesticks and a turn lower from that resistance zone could pull AUD/CAD back toward the mid-range levels near .9135 and the 100 and 200 SMAs. If sellers build enough momentum, AUD/CAD could even revisit areas of interest closer to the .9075 range support.
But if the Aussie keeps a bullish lean against the Loonie, AUD/CAD could finally push through the .9200 resistance for the first time in weeks and make a run toward higher inflection levels like .9240 or .9270.
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.
