The AUD/CAD has been trending lower on the back of a dovish RBA and not-so-dovish BOC. The downward trend may have resumed following yesterday's price candle:
Key technical points
- Price has been making lower lows and lower highs
- On Wednesday, price formed an inverted hammer candle off the bear trend
- The hammer candle suggests sellers may have returned.
- Resistance is at around 0.8920, the head of the inverted hammer candle
- Support seen around 0.8850, but given the bearish price structure this level could break
- Bearish idea would become invalidated upon a potential break above inverted hammer candle around 0.8960.
Overall, the AUD/CAD looks bearish and wouldn't be surprised to see new lows on the year on this pair. However, a potential break above 0.8960 could lead to a short squeeze towards stronger levels of resistance.
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