Chart of The Week - AUD/CAD at the Confluence point in the Horizontal Channel

AUD/CAD – AUD/CAD at the Confluence point in the Horizontal Channel.  

• Resistance Zone: 93.00 to 93.30
• Key Resistance: 92.30
• Major Pivot Point: 91.10
• Key Support Level: 90.35
• Support Zone: 89.40 to 89.10
• 200 Day SMA – Green Line
• 50 Day SMA – Red Line
• CBOE VIX – Volatility Index @ 33.52 +6.50 (+24.06%)

Trade Insights – AUD/CAD –

Viable long positions above the Pivot Point the chart at 91.10, with the first target of the Key Resistance Level at 92.3. Then the test of Resistance Zone at 93.00 to 93.30 (Tradingview).

Alternatively, Short positions below the Pivot Point at 91.10 to head towards the Support Zone at 90.35 and then lower towards the support zone at 89.40 to 89.10.

Chart Analysis:

Directional bias: 2 Weeks - AUD/CAD

AUD/CAD chart shows that after briefly breaking above the parallel horizontal channel where the prices were contained between the Resistance Zone and the Support zone on the chart the pair dropped sharply back to re-enter the channel and prices are now stabilizing just above the Pivot of the 91.10. This level is also the confluence point of 61.80% Fibonacci and the mid-level of the horizontal channel. After moving sideways in this channel for several months the pair bounced and tested the 95.00 resistance level to decline sharply later.

At this stage, the prices action could create higher highs and lower lows on the chart. Suggesting a breakaway from the Parallel horizontal channel is possible and a recovery in the pair that has been struggling for over a year now.

The RSI Indicator shows that the prices are recovering from the oversold levels just above 30 points.  The 50-day SMA red line moved above the Green 200 Day SMA line at the beginning of April and now the prices are dropped below the 200-day SMA green line suggesting there could be a recovery in the price action.

Fundamental Overview: 

Australia published its CPI data today that saw the CPI rose 2.1% this quarter and over 12 months to March 2022 quarter the CPI rose 5.1%. This could push the AUD higher against the Canadian Dollar. However, the weak metal prices have weakened the Aussie Dollar amid ongoing Chinese Lockdowns. The Canadian CPI data published earlier on 20^th April showed an increase of 6.7% year over year.

Click to see this week's market insights: Market Insight - Growth Engine Is Slowing Down!