From the looks of it, the CAD is about to lose some ground against the USD ahead of the holidays. Notice how the rising trend line that I drew is holding, keeping the USDCAD bears at bay. Stochastics is also at oversold territory, adding more reason to believe that the pair is going to go up, up and away! With that said, look for a move towards 1.0750, last week’s high. On the flip side, if buying momentum fades, the pair would probably retest the rising trend line again, somewhere around 1.0600.
Is this the break that the bears have been waiting for? If you’ve been keeping up with my daily chart art, you’ll know that I’ve been writing about this pair for quite a while now as it is showing some nice technical signals. For now, it seems that support has finally broken and the Kiwi bears are starting to jump in. Like I said yesterday, the ultimate downside target in the event support breaks would be 0.6800 but please do be careful of 0.7000 too. It is a nice, juicy, round and psychologically significant number and we could see a bit of buyer support there. However, if you’re part of the bull camp and into picking bottoms, closely watch if 0.7026 would hold as a bounce in this level could take the pair to 0.7300 again.
Lastly, let’s end today’s com-doll special with a look at the AUDUSD! The pair has been on a major fall after breaking the neckline of a former head and shoulders formation. However, stochastic is showing oversold conditions, hinting that we may see some last minutes Christmas shopping as buyers reenter the market. Ha! If they succeed in driving up price, they may find some resistance at 0.8900, which seems to be an area of interest. Further resistance may be found near the 0.8990 price area, which coincides with the .500 Fibonacci retracement level, as well as the former neckline. On the other hand, if selling pressure remains strong, we could see price continue to fall until finally finding support around 0.8600.