Loonie strength from the spike in oil prices and risk aversion sentiment likely pushing down the Aussie dollar. We actually saw the price above
the 0.91250 last week but this morning on Asian session bears on the pair quickly jumped on that opportunity to short AUD/CAD once again.
Going forward, volatility could stay up on AUD/CAD as we will likely continue to see further developments on the Saudi attacks, and we may even get help from upcoming economic updates from both Canada (manufacturing sales) and Australia (RBA meeting minutes & home prices). So, depending on how those economic updates flash out, we could see types of setups for both the bulls and the bears.
If we're bear on this pair, there are a couple of technical setups to watch if the market environment stays risk-averse and bullish on oil prices. Strong resistance has formed around the (0.9125) area where price retested nearly before the European session. Seller dragged price lower once again. We’ve got to watch the broken older resistance area (0.9050). A break lower there would likely draw in momentum sellers in this environment, and the potential R:R would be attractive around the previous swing lows (0.8925).
If we're bull on this pair, the short-term trend higher is in our favor and this pullback lower could be a fresh buying opportunity. If risk aversion sentiment fades and the Australian data comes out positive, then a break above the resistance (0.9125) is our cue to start working on a long position plan. The next potential resistance area July 2019 highs (0.9245), so the potential return-on-risk of a swing trade looks very attractive around that level.
Cheers!
the 0.91250 last week but this morning on Asian session bears on the pair quickly jumped on that opportunity to short AUD/CAD once again.
Going forward, volatility could stay up on AUD/CAD as we will likely continue to see further developments on the Saudi attacks, and we may even get help from upcoming economic updates from both Canada (manufacturing sales) and Australia (RBA meeting minutes & home prices). So, depending on how those economic updates flash out, we could see types of setups for both the bulls and the bears.
If we're bear on this pair, there are a couple of technical setups to watch if the market environment stays risk-averse and bullish on oil prices. Strong resistance has formed around the (0.9125) area where price retested nearly before the European session. Seller dragged price lower once again. We’ve got to watch the broken older resistance area (0.9050). A break lower there would likely draw in momentum sellers in this environment, and the potential R:R would be attractive around the previous swing lows (0.8925).
If we're bull on this pair, the short-term trend higher is in our favor and this pullback lower could be a fresh buying opportunity. If risk aversion sentiment fades and the Australian data comes out positive, then a break above the resistance (0.9125) is our cue to start working on a long position plan. The next potential resistance area July 2019 highs (0.9245), so the potential return-on-risk of a swing trade looks very attractive around that level.
Cheers!