AUD/CAD: Support Turned Resistance at Parity

Time to take advantage of the weakness in the Chinese economy and the yuan with another AUD short? Got my eyes locked on AUD/CAD this week and here’s why:

AUD/CAD Daily Forex Chart

AUD/CAD Daily Forex Chart

As Big Pippin shared in today’s Chart Art, the pair is currently testing support turned resistance right at parity. I was able to grab a bunch of pips off an AUD/CAD short around parity last year and I’m inclined to think that this level will hold as resistance yet again. After all, stochastic has already reached the overbought region and is starting to make its way down.

I’m a bit hesitant to jump in at market though, as I already have an AUD/USD swing short open. But with the freshly released weaker-than-expected Australian quarterly construction work done and the potential 1.0% decline in the country’s private capital expenditure, I don’t really want to get left behind.

If I do decide to short, I plan to set a wide stop at the 1.0200 mark and aim for the previous lows near .9400. That should give me a nice 3:1 reward-to-risk ratio, which I can still improve if I add to my position later on. What do you think?

Cheers,

Happy time

Other Popular Articles:

What is the STA strategy? Q4 2013 in Review Comdoll Trading Kit NZD/USD Trade

  • Christopha

    Nice setup. What setting are you using with the stochastic. I am using standard 5,3,3 setup which seems to different to the one in the picture.

    • Happy Pip

      I’ve got slow stochastic settings at 14,3,3

  • john david

    do u still have ur aud/usd still on what r ur plans

    • Happy Pip

      Yep, I still have my AUD/USD short open and I’m considering adding to my position now that we’re in a very strong risk-off environment. What do you think?

  • Darthfrancis

    I really want to short this but to be honest there’s alot of pressure building up at the VBRN 1.000 and with this pair making higher lows its seems a break above is just as possible as a reversal.

    So good luck to any on either side of this.

    Darth

    • Happy Pip

      Yikes, thanks for sharing your thoughts! What’s the VBRN though?

  • Ben

    This is a good set-up, I like it their is a shooting star on close of 2/21/14.
    Good luck!

    • Happy Pip

      Thanks for checking out my blog and the kind feedback! Looks like it’s heading down now… finally!

  • Hunter

    Yeah AUD/CAD is looking great for a short from my perspective too! The more traders looking to short, the better it sounds… Pretty confident some AUD Shorts will be solid winners!

    • Happy Pip

      Thanks for the positive feedback! Were you able to jump in?

  • Jake

    Looks like a good set up and one I’d also consider. I’m just waiting for price to make a clear break below a key daily resistance/support level around 99.15 before I consider going long-term short on this pair.

    • Happy Pip

      That’s a good idea to wait for confirmation. Fundamentals seems to be on its side for now as well. Did you short already?

  • Pingback: AUD/USD & AUD/CAD Trade Updates()

  • Kickytink

    Are you still in the trade Happy Pip?
    I’ve been in since the 26th.
    It is starting to look a bit bullish
    Any thoughts on the CAD interest rate decision tonight?
    I might be jumping ship soon, I think.
    Anyways best of luck trading and thanks for sharing!