Trading opportunities for the currency pair: The price has twice rebounded from the S1 line. Because of this, the Aussie dollar is expected to strengthen against its Canadian counterpart as far as the TL1 line with targets of 1.0211 (high point from the 7th of June) and 1.0327. This scenario will not play out if the daily candlestick closes below 0.9948.
Background
The previous idea for the AUDCAD pair was published on 12/09/16. At the time of its publication, the Aussie was trading at 0.9833 against the Canadian. The pair has been caught in a sideways trend for the last 15 weeks. I was expecting the price to exit downwards from there. This prediction should have played out when the price broke into the 0.9780 – 0.9799 range with targets of 0.9718 and 0.9668. This didn’t happen, however, as the price exited a 4-week flat upwards instead.
Current situation
The AUDCAD cross has been in a sideways trend since the 20th of March this year, trading between 0.9925 and 1.0346 (421 pips). In this idea, I’m not expecting the price to exit this range despite the fact that the pair is definitely ready for a new trend.
On Friday, the price closed in the middle of the triangle formation. The price rebounded twice from the S1 line. This shows that buyers don’t want the price to go any lower than this.
The idea is that the Aussie dollar will strengthen against the Canadian up to the TL1 line with targets of 1.0211 (high point from the 7th of June) and 1.0327. A breakout of 1.0107 (high point from the 16th of June) and 1.0123 (S1) will indicate movement in the right direction. This will not play out, however, if the daily candlestick closes below 0.9948.
Notation: TL – trend line, R – resistance, S – support.
Daily chart. Source: TradingView
Source: ALPARI
