AUD/CAD traded higher during the European morning Tuesday, after it found support near 0.9524 on Monday. Overall, the pair is trading above all three of our moving averages, as well as above the upside support line drawn from the low of March 1st. What’s more, after breaking above the key resistance (now turned into support) territory between 0.9475 and 0.9490, the recovery accelerated. In our view, all these technical signs paint a positive near-term outlook.
Currently, the rate is challenging the 0.9550 resistance barrier, which is fractionally above Friday’s peak and is defined by the peak of February 1st. If the bulls are willing to drive the action above that hurdle, then we may see them aiming for our next resistance, near 0.9580, defined by the high of January 31st. Another move higher, above 0.9580 may allow the bulls to put the 0.9607 area on their radars, which is near the high of January 2nd.
Shifting attention to our short-term oscillators, we see that the RSI stands above 50 and now appears ready to move above its 70 mark, while the MACD lies above both its zero and trigger lines, still pointing up. These indicators detect strong upside speed and support the case for AUD/CAD to continue drifting north for a while more.
On the downside, we would like to see a clear dip below 0.9524 before we start assessing the likelihood of a corrective retreat. Such a move could signal that the bulls want to take a small break and may trigger a fall towards 0.9490. If that barrier fails to attract buyers, another slide towards the crossroads of the 0.9475 level and the aforementioned upside line may be possible. Having said all that though, in our view, the move that could signal a bearish reversal is a decisive close below 0.9475.
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