Lets explore the AUDCAD today, for the past few years we have seen the downtrend that began in 2017 and is still continuing. Taking a look at the weekly timeframe, we can see the channel that price has formed and consistently bouncing back into the channel.
Price eventually broke above the trendline and rallied towards one of the strong resistance lines at 0.93875. This may just be the Bulls flexing or a major reversal signal. We have to monitor this level to reconsider our short bias.
Switching to the daily timeframe you can see the short term Bullish momentum that eventually died out, we were able to grab a few Pips in this move. Now that we see the bulls struggling to push beyond recent highs we are certain that the weekly downtrend support is holding, the question now is how strong is it. The next few days will give us that answer.
Anayzing the uptrend on the 4 hour chart, we notice the head & shoulder pattern that formed, this a potential bearish signal which may confirm the continuing downtrend we have been witnessing. However we also notice how the 0.382 fib retracement line is holding, this is where the neckline of the formation is holding.
We will look into placing a short position below the neckline @0.92726, stop loss @0.93363 and a take profit @0.91500.
We are also monitoring the possibility of a long position above the 0.236 fib replacement, confirming how strong the support levels are holding and continuing the uptrend.