Throwing this simple technical setup in AUD/CAD on the watchlist after a strong breakdown in recent sessions. What’s happening?
Downtrend Support Break On AUD/CAD
AUD/CAD bears are on the move, pushing the pair past a strong support area around .9700 handle, likely on recent geopolitical developments including an optimistic meeting between Mexico and Canada on NAFTA, fresh oil inventory data signaling tightening, and maybe even a little bit of speculation that Trump will take it easy on potential tariffs for Canada after U.S.- EU Trade concerns fade. Whatever the case may be for the recent bearish push, it looks like this trend lower since the beginning of June isn’t likely to fade soon.
But with the stochastic indicator showing potentially oversold conditions and potential profit taking ahead of the weekend, I’m staying in watchlist mode, waiting for a potential pullback to that broken support area, which is now starting to cross with the pattern of lower ‘highs.’
The catalysts for the next move is likely to be a slew of top tier events for both Canada and Australia next week, most notably the monthly read on Canadian GDP data, and we can’t forget the likelihood of more geopolitical developments with trade negotiations around the world being center stage in recent weeks. We’ve also got monetary policy decisions from both the RBA and BOC in August, so this is definitely a pair to vibe with in the coming weeks.
Stay tuned for moves I’ll likely make 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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