The Australian Dollar Trying Its Best Against the Canadian Dollar

Apr 01,2019 08:40   Source:Earnforex

Even though the Australian dollar succeeded in extending above the important 0.9483 resistance level, it closed the week under this area. Surprisingly, this week gapped above it for a considerable amount of pips.

Long-term perspective

The preceding phase of this latter rise belongs to a descending move that started in December 2018 and unfolded by consolidating three flats: the upper one which is edged by 0.9698 with 0.9583, the middle one limited by 0.9583 with 0.9483, and the lower one edged by 0.9483 with 0.9387. On March 21, 2019, the price managed to pierce the resistance of the lower flat and give way to an appreciation that got very close to the resistance of the middle flat, 0.9583, respectively. By doing so, it materialized a new high at 0.9562 that if joined with the high on February 21, 2019, at 0.9487 translates into an upper channel with a support line that starts at 0.9315. In this context, one reason for the return under 0.9583, which was fueled by the Canadian dollar GDP, would be the formation of a new higher-low by confirming — of course, as support — the lower line of the potential ascending channel. On the other hand, the price could remain above the 0.9483 level and mark a new sideways movement within the earlier mentioned middle flat, defined by 0.9583 with 0.9483. This last scenario also leaves the door open for the formation of a new higher-low that would validate the upper channel.

Short-term perspective

The pair is in an ascending move — the green boxes highlighting the higher-lows — at the end of which, just like in the case of AUDNZD, an angled rectangle can be observed. For now, the lowest point of this chart pattern rests on a triple-support area, marked by the support line of the ascending move, the support line of the angled rectangle, and the 0.9479 level. Being such an enforced support area, it is reasonable to think that the bulls will try to push prices higher, but whilst the price remains contained within the boundaries of the angled rectangle, a revisit of 0.9399 must be considered. On the other hand, if the price manages to seize the area above the resistances of 0.9522 level and the angled rectangle, the next target would be 0.9565.

Levels to keep an eye on

D1: 0.9583 0.9483 0.9387
H4: 0.9465 0.9522 0.9479 0.9399

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