Technical Analysis – Charts of The Week - Dec 16

AUD/USD

• Resistance Zone: 0.7500 to 0.7550
• Key Resistance Level: 0.7380
• Major Pivot Point: 0.7185
• Key Support Level: 0.7090
• Support Zone: 0.7000 to 0.6950
• Last Analysis Date: Blue Vertical Lines
• 200 Day EMA – Green Line
• 50 Day EMA – Red Line

Trade Insights – AUD/USD – Chart shows Viable Long positions above the Major Pivot point at 0.7185, targeting the key resistance level at 0.7380 and then the next target of the resistance zone at 0.7500 to 0.7550

Alternatively, Short positions below the Key Support Level at 0.7090 targeting the Support Zone at 0.7000 to 0.6950.

AUDUSD Daily Chart

Chart Analysis:

Directional bias: 2 Weeks AUD/USD

The AUD/USD chart shows that the pair is attempting to advance through the Descending Channel that got triggered in February after AUD touched the 0.8000 mark against the dollar. Trading just under the Pivot Point at 0.7185 awaiting a stronger push higher.  

There could be possibilities of long positions above the Pivot point to test the Key Resistance level at 0.7380 which is also the 38.20% retracement level of Fibonacci. After consolidation, the pair could head towards the 0.7500 to 0.7550 Resistance Zone that was touched in October the last time. This breakout in October above the Downward channel was short-lived and in October itself the pair retraced back to enter the channel and at the same time fell sharply to hit the trough at 0.7000 long-term support on the chart.

If the downtrend is to be continued for a few more sessions and the attempt of AUD breakout would prove fake, then the Bears can take short positions from the Key Support level of 0.7090 to target the 0.7000 to 0.6950 Support Zone.

The pair is below both the 50 Day EMA and 200 Day EMA levels indicating bearish bias of the market and the MACD is indicating towards the higher side for the AUD/USD pair.

Fundamental Overview: The Reserve Bank of Australia (RBA) is in no rush to increase the interest rates when the FOMC is planning to reduce the monthly pace of its net asset purchase and Jerome Powell indicating 3 rate hikes in 2022. This means the AUD might see more downside over the coming months. If RBA is going to continue with its lower rate regime is to be seen especially when employment numbers are expected to increase in this month after contracting for the last 3 months.

AUD/CAD

• Resistance Zone: 93.40 to 93.70
• Major Pivot Point: 92.60
• Key Support: 92.15
• Support Zone: 91.15
• Last Analysis Date: Blue Vertical Lines
• 200 Day EMA – Green Line
• 50 Day EMA – Red Line

Trade Insights – The AUD/CAD Chart shows Viable Long Positions above the Pivot of 92.15. First targeting Key resistance level at 92.60 and then the Resistance Zone at 93.40 to 93.70Alternatively, possible Short Positions if the prices fail to push higher above the Pivot with the first target of Key Support at 91.15 and then with further weakness the test of Support Zone at 90.00 to 89.70.

Chart Analysis: 

Directional bias: 2 Week AUD/CAD

Since our last analysis, the AUD/CAD pair has completed a full cycle peaking at the Resistance Zone and dropping below the previous Support Zone to almost touching the 90.00 mark, the lowest point in recent times. It seems the pair is moving in a wider Descending Channel and as of now hitting the upper limit of the Channel if it is drawn from connecting the peak of February to with the trough of December in the chart.

The AUD/CAD pair is hovering just below the Pivot point at 92.15 and could be already finding headwinds at this level as this is quite an important point to advance through for the Bulls to continue the upward momentum further. Possible Long Positions above the Pivot to test the Key Resistance at 92.60 and then the Resistance Zone at 93.40 to 93.70.

The prices have moved above the 50 Day EMA and now apparently heading towards the Key Resistance zone at 92.60 which is also near the 200 Day EMA level. The sideways Parallel channel between the Resistance and Support zones has become wider this time on and is covering the range from 93.40 to 89.70. If prices drop from here, then short positions are quite a possibility to test the Key Support level at 91.15 and then the Support Zone at 90.00 to 89.70. RSI indicates that prices are moving towards the overbought category with more room to stretch upwards. Fundamental Overview: AUD and CAD are both known as commodity currencies and the role of Australia and Canada in Global commodity supplies like crude oil, natural gas, and iron ore.  The movement in the Canadian and Australian economic events determines the exchange rates. Top-of-the-line economic events include GDP, Employment Change, Industrial Production, and Consumer Price Index. Better than forecast data increases the demand for related currency and impacts the value of either the Australian Dollar or the Canadian Dollar, causing fluctuations in the AUD/CAD exchange rate.