AUDCAD is a currency pair I rarely mention, which is especially true of late. Since the start of 2016, the pair has been plagued by choppy price action that until last week, had only attributed to a 350-pip range.
Friday’s session broke this streak. Not only did sellers push prices to new 2016 lows, they closed the pair back below former channel resistance on both a daily and weekly closing basis.
The weekly chart tells the story…
From a technical perspective, this level was expected to hold as new support, as it did for a brief period in early February. However, Friday’s failure to maintain these levels (above the 0.9700 area) indicates weakness and flips pressure back to the downside.
The recent break first exposes the 0.9580 handle followed by 0.9410 and 0.9170. All of these levels played a role between April and November of last year.
The close proximity of 0.9580 to current prices means that traders may be better off waiting for a break lower before considering a short opportunity. This would allow a more favorable entry from a risk/reward perspective.
