AUDCAD slowly heading towards 50% retracement level, cautious bear wait
November 21, 2018 (Investorideas.com Newswire) There has been a sharp fall in the AUDCAD pair after it hit the major resistance level at 1.02427. From that level, the bears took control of the market and pushed the pair significantly lower. Though the bulls tried to regain their bullish strength the 100 and 200 weekly SMA but the bears managed to outrun the bulls in the market. However, the pair found some strong support near the critical support level at 0.91224. After the formation of the bullish engulfing pattern near the critical support level, most of the aggrieve buyers made a decent profit by executing fresh long orders. Though the overall bias for the AUDCAD pair was extremely bearish the recent improvement in the Aussie labor economy helped AUDCAD bulls to rally higher. So any bullish price action signal might offer decent profit taking opportunity to the retail traders.
AUDCAD technical analysis
From the above figure, you can clearly see the Aussie bulls are pushing the AUDCAD pair towards the major resistance level at 0.96825. From this level, we might see some ranging market since we don’t have any high impact news which might refuel the Aussie bulls. However, a daily closing of the price above the 50% retracement level will eventually lead this pair towards the 61.8% retracement level. This level is going to provide a significant amount selling pressure to the AUDCAD pair since the 100 weekly SMA lies at 0.98147. Executing short orders in your fx trading account near the 61.8% bearish retracement level with price action confirmation signal seems extremely logical at the current scenario. However, a clear break of the price above the 61.8% retracement level will eventually lead this pair towards the high of 18th March 2018. Breaking above the high will be very hard since we have plenty of resistance candle just above that level. However, a clear break of the critical resistance level at 1.02364 will confirm the end of the medium-term bearish rally for this pair.
On the downside, we need to break the nearest minor support level at 0.95472 to establish fresh selling pressure to this pair. A daily closing of the price just below this level will eventually lead this pair towards the next major support level at 0.91035. This level is going to play a vital role since a clear break of this level will result in a sharp decline. However, any bullish price action confirmation signal near that critical support level will be an excellent opportunity to execute fresh long orders. A weekly closing of the price below the critical support level at 0.91035 will eventually lead this pair towards the next major support level at 0.85600.
Fundamentally the Aussie dollar is doing relatively well in comparison with the Canadian dollar. Over the past months, the more jobs have been added to the Aussie economy and strong CPI data suggest a strong recovery attempt. On the contrary, the recent drop in the price of oil clearly exhibits weakness in the Canadian economy. Most of the long-term traders are cautiously waiting for the Canadian core retail sales data scheduled on Friday. A negative data release will boost up the AUDCAD pair in the global market. On the contrary, a strong positive data release will create decent selling pressure to the AUTOCAD pair which might result in ranging market. Considering all the fundamental factors, the overall bias for the AUDCAD pair remains bullish. Any bullish price action confirmation signal near the critical support level might be a decent opportunity to execute fresh long. Moreover, the technical data also suggest a strong recovery attempt in the AUDCAD data. However, the Aussie bulls will have to take out some of the major resistance levels before it surges in the global market. So the retail traders are advised to stay very cautious as the pair is currently trading at a very sophisticated zone.
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