![Potential Downtrend Resistance Forward on AUD/CAD? Potential Downtrend Resistance Forward on AUD/CAD?](https://i0.wp.com/bpcdn.co/images/2022/02/08123915/AUDCAD-preview-780x336.png?resize=696%2C300&ssl=1)
Forward of main financial updates in February, we’ve received a stable technical setup to take a look at that might result in a swing or longer-term play on AUD/CAD.
AUD/CAD: Every day
AUD/CAD hits the highest of our FX watchlist this week with a number of technical arguments within the works, probably calling for a bearish reversal forward.
On the every day chart above, we are able to see the pair has been in a stable downtrend since final Summer time, with clear swing tops and bottoms alongside the best way.
Final week, it appears like a recent backside was made and the pair now appears to be reversing again to the upside, now testing the Fibonacci retracement ranges and the beforehand robust (however now damaged) assist space across the 0.9100 main psychological stage.
We’re additionally seeing an overbought sign from the stochastic indicator, and once you mix all of those patterns, the percentages are rising technical sellers could also be able to hop again into the downtrend.
Basically, it’s seemingly been the divergence in financial coverage strikes that’s fueled the downtrend in AUD/CAD as expectations are excessive the Financial institution of Canada will hike rates of interest in 2022 to fight inflation, whereas the Reserve Financial institution of Australia maintains that top inflation charges are transitory and no fee hikes from the RBA appear to be imminent.
what’s coming forward, we do have a number of main catalysts in February that might affect the subsequent directional transfer for AUD/CAD. Most notably, Canadian CPI information subsequent week ought to spark motion within the Loonie, whereas the month-to-month Australian employment date a day after ought to get the Aussie going.
Total, if the information continues to level to excessive inflation within the Canada whereas Australian jobs information disappoints, then this bearish technical setup could have excessive odds of drawing in bears in February.
We’ll be on the look out for these situations to play out, and if the financial information helps additional bear strikes, we’ll look to leap within the development if we see bearish candlestick patterns kind within the potential resistance space marked above.
However what do y’all assume? Will we see resistance quickly and can AUD/CAD return to the downtrend? Or will the falling ‘highs’ sample ultimately break? Please tell us in our remark part under!
This content material is strictly for informational functions solely and doesn’t represent as funding recommendation. Buying and selling any monetary market entails danger. Please learn our Danger Disclosure to be sure to perceive the dangers concerned.