Bearish Trendline at 4-Hour Time Frame: AUDCAD has been following a bearish trendline in the 4-hour time frame, indicating a prevailing downward momentum in the market.
Observation of Dow Theory: Additionally, the market has been adhering to the principles of Dow Theory, reinforcing the bearish sentiment.
Retracement and Rejection: A retracement up to the 0.5 Fibonacci level was observed, followed by a clear downward rejection, suggesting strong selling pressure at higher levels.
Current Position at Key Support Zone: Presently, the price is hovering around a critical support zone, signifying a pivotal area where significant price action is anticipated.
Trade Setup: We anticipate a continuation of the bearish move if the price breaks below this key support level.
Entry Strategy: A prudent entry point for short positions is identified near 0.88863, aligning with the bearish outlook.
Risk Management: To mitigate potential losses, a Stop Loss is recommended near 0.89279, providing a buffer against adverse price movements.
Profit Targets: Our profit-taking strategy involves targeting TP-1 at 0.8450 and TP-2 at 0.88030, reflecting our expectation of downward price movement.
Conclusion: In conclusion, based on the technical analysis of AUDCAD, we anticipate further downside potential, with a well-defined entry point, risk management, and profit-taking levels in place to optimize trading outcomes.