Did AUD/CAD Complete An Inverted 'Head and Shoulders'?
JFD Team | Apr 14, 2021 07:31AM ET
AUD/CAD traded higher on Wednesday, breaking above the 0.9643 barrier, which could be seen as a neckline of an inverted “head and shoulders” formation. That said, the advance was stopped near the 200-EMA on the 4-hour chart, and thus, we prefer to see a clear move above that moving average before we start examining the completion of the bullish reversal. For now, we will adopt a cautiously-positive stance.
If indeed the rate climbs above the 200-EMA, the bulls may get encouraged to push the battle towards the 0.9720 territory, which provided resistance on March 18 and 22. If they are not willing to give up near that zone this time around, we may see extensions towards the peak of March 11th, at around 0.9795.
Taking a look at our short-term oscillators, we see that the RSI lies above 50, points up, and looks to be approaching the 70 line. The MACD runs above both its zero and trigger lines, pointing north as well. Both indicators detect upside speed and support the notion for further advances in this exchange rate.
Now, in order to abandon the bullish case and start examining whether the bears have gained the upper hand, we would like to see a slide below the 0.9533 barrier, marked by the low of Apr. 12. This will confirm a forthcoming lower low on the 4-hour chart and may pave the way towards the low of Apr. 1, at 0.9490, or towards the low of Dec. 7, at 0.9457. If neither level is able to stop the decline, the bears may take the rate all the way down to the 0.9405 area, defined as a support by the low of Nov. 5.
Get The News You Want
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.