AUD/CAD looks ready to turn lower from a key resistance zone!
Will the pair extend its downtrend?
I’m looking at the 15-min chart for clues!
AUD/CAD: 15-min
Commodity-related currencies have been on shaky ground lately thanks to weaker-than-expected Chinese data and growth concerns discouraging risk-taking.
Fortunately for CAD buyers, the oil-related Loonie is getting some support from crude oil prices inching higher this week.
AUD/CAD, which has been making lower highs and lower lows, is now turning lower after failing to break the .9000 resistance on the 15-minute time frame.
And why not? Aside from a major psychological level, the .9000 area lines up with a descending channel resistance, 50% Fibonacci retracement, AND the 100 and 200 SMA resistance levels on the chart.
Will AUD/CAD extend its short-term downtrend?
It’s possible. The relatively hawkish RBA meeting minutes printed earlier today didn’t do the Aussie much favor against the oil-supported Loonie.
If today’s Canadian CPI reports surprise to the upside, then we could see AUD/CAD gain bearish momentum all the way to its .8950 previous lows.
But if today’s U.S. retail sales data and other market themes encourage risk-taking, then AUD could attract enough buyers and push AUD/CAD above the descending channel pattern on the chart.
I might consider an upside breakout trade if Canada’s inflation numbers encourage dovish BOC expectations or if lower crude oil prices drag the Loonie much lower.
For now, though, I’m looking to short AUD/CAD down to its previous support area with stops just above the trend line resistance zone.
Think AUD/CAD can maintain its bearish trend?
