August has been a lackluster month for finding quality opportunities.
That isn’t surprising, though, as August has always been one of the slowest months for trading, if not the slowest.
As the last full month of summer for many, it’s a popular time to squeeze in last-minute vacations.
And that means less liquidity.
But that doesn’t mean there is nothing to do.
Even the slowest months can generate a few quality setups if you’re patient enough.
One pair that could be gearing up for such a setup is AUDCAD.
I don’t write about the pair very often as it tends to chop around without a lot of direction.
It also tends to ignore horizontal levels more so than some other currency pairs.
However, when in doubt, always look for a channel you can play as they tend to hold up a bit better than horizontal support and resistance.
You can see how AUDCAD has carved a descending channel starting from the April swing high.
Notice too how the last two corrections in May and July stalled at or very near the 50% retracement of their respective impulsive moves.
If this pattern continues, we could see AUDCAD stall again in the 0.9070 region.
Just keep in mind that the market may want to retest channel resistance again, which means potentially waiting until late August if not early September.
I also have no interest in entering AUDCAD until we see an end to this sideways consolidation.
I want to see buyers push prices higher into that 0.9070 area and ideally retest descending channel resistance near 0.9100.
Key support comes in at 0.8890.
If this pattern continues, we could see AUDCAD selloff to fresh multi-year lows at or below 0.8750 over the coming weeks.
Last but not least, no pattern lasts forever.
If this turns out to be the last push from sellers and AUDCAD takes out channel resistance, we will likely see the pair reach back to that 0.9230 resistance area.
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