The AUD/CAD pair formed a head and shoulders top pattern with neckline breakdown earlier this month.
This pattern is similar to the one seen in but shows a bit more room to the downside towards July 2022 lows.
The RSI pointing southward and the MACD crossing the zero line indicate that some weakness could persist in the short term.
From a monetary policy perspective, the Bank of Canada is now acting more hawkishly than the Reserve Bank of Australia.
The BoC raised its overnight rate target by 75 basis points (bps) to 3.25%, while the RBA hiked by 50bps to 2.85% this week.
The CAD benefits not only from the size of the relative hike, but also from the forward guidance.
With inflation expected to rise, the BoC has stated that interest rates will need to rise further. On the other hand, the RBA Governor Philip Lowe said that the case for slower pace of hikes is growing, and that will be dependent on the upcoming data.
The recent breakdown of the ascending channel formed in July 2022 by the 10-year yield spread between Australian (AU10Y) and Canadian government bonds (CA10Y) suggests that markets now expect interest rates to rise relatively more rapidly in Canada than in Australia.
Idea written by Piero Cingari, forex and commodity analyst at Capital.com
I totally disagree with this analysis. AUDCAD is not going to 0.87500. The pair is now getting bullish and we are headed to 0.9100. There is an inverse head and shoulder forming on the 1D chart. This indicates a potential bull run!😊
ArtemKante
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are you nuts ? 😂
Alloys
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So far, so bad 🤣
BKTradingAcademy
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Great analysis! I agree here and looking for a short around 8885 if price returns to the area and shows continued bearish confirmation.
CryptoCheck-
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Great update! Thanks for sharing it
financialfreedomgoals101
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Great Chart Pattern Analysis, You Got There Fellas!