AUD/CAD recently broke out of consolidation to continue its downtrend. I’m in watch mode for now to see if a strong area of interest will be retested.
AUD/CAD Support Break & Retest?
Fundamentally, sentiment has been driving the Loonie higher in recent weeks thanks to broad speculation that we’ll get an interest rate hike from the Bank of Canada. On the other side of the pair, Australia’s data has been mixed with business sentiment showing positive signs, but consumer sentiment, housing, and growth have taken a step back in the last quarter.
Combined with the broad trend lower in AUD/CAD since hitting a peak back in May around 1.0300, I’m short biased in the longer-term and the short-term, especially now that there’s a bit of price confirmation that the trend lower is back on track. After about a month of tight consolidation around parity, the market has broken below that support area around .9950, which was also a strong support area between April and May of 2017. So, a potential broken support-turned-resistance play is setting up, which also lines up with the trend of lower “highs” marked on the chart above that could draw in sellers if retested.
But with the Jackson Hole meeting in the works and the weekend quickly approaching, no new trade orders for now in case we do get surprise rhetoric from the central bankers not inline with the current market expectations.
Be on the lookout for a new trade idea next week and as always, remember to never risk more than 1% of a trading account on any single trade. Adjust position sizes accordingly. Create your own ideas and don’t simply follow what I do.
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