AUD/CAD has formed lower highs and found support around the .9075 level, creating a descending triangle on its 4-hour time frame.
Can it bounce off resistance again?
Or will we see a breakout this time?
AUD/CAD: 4-hour
AUD/CAD 4-hour Forex Chart by TradingView
Stronger than expected Australian CPI released earlier this week helped cement hawkish RBA expectations, lifting AUD/CAD closer to its descending triangle top.
This chart pattern has been holding for nearly a couple of months already, though, so are sellers just waiting to jump in at the resistance?
This potential ceiling lines up with R1 (.9160) which could make it a formidable barrier, possibly sending AUD/CAD back down to the triangle bottom again.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!
Long green candlesticks closing above the resistance, however, could suggest that a bullish breakout is happening and that the pair could set its sights on the next bullish target at R2 (.9220) or for a rally that’s the same height as the triangle formation.
Only a couple of mid-tier reports from Australia (quarterly capital expenditure and private sector credit) are lined up for the remainder of the week while traders in Canada are looking forward to the Thanksgiving holidays, which could mean higher volatility on profit-taking as the weekend draws near.
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.