AUDCAD - Bullish CAD On The Horizon?Analysis:
Looking at price action we can see that price is in a downwards trend. We're seeing lower lows and lower highs being formed which confirms that we're in a downwards trend, so we're only looking for shorting opportunities. Price has made a deep pullback to the current lower high and we did put in a new lower low so this is looking like a great place to enter. At this level we also can see that it has been tested multiple times and we can see big rejections from this area showing that there is a lot of pressure at this level so it's more likely to hold and continue to the downside rather then it breaking and heading to the upside, especially when we add the fact that we're also in a downwards trend. We don't have any other added confluences for this trade, however the technicals are still valid for our strategy. Fundamentally the AUD is 3rd weakest major currency whereas the CAD is the 2nd weakest currency so this doesn't go in our favour but this isn't the full picture. Recently we saw a huge decrease in long positions on the CAD and the AUD, but we saw a small decrease in short positions on the AUD whereas we saw a huge decrease in short positions on the CAD. Basically meaning that more short positions were closed on the CAD then the AUD signifying that there might be an end coming to the bearishness for the CAD. With our speculation on oil prices rising which is heavily correlated to the CAD we can see some strong bullish momentum on the horizon for the CAD which is why fundamentally we prefer the CAD over the AUD. With all of the technicals and fundamentals combined together we get a bearish outlook on this pair.
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Stay Safe - JPI
Disclaimer:
This does not constitute as financial advise. We are not responsible for any monetary loss that you endure. Trading is hard to be profitable with and we take losses just like everyone else does to. Our ideas won't always be correct which is why we urge you to always do your own analysis first before entering into the market but please feel free to use our analysis to assist you with yours.
