AUD/CAD traded higher today, breaking above the key resistance zone of 0.9475 and confirming a forthcoming higher high. On the 1st of November, the rate surged and broke above the medium-term downtrend line drawn from the peak of the 22nd of June. What’s more, it now looks to be printing higher highs and higher lows above a short-term upside line, taken from the low of the 24th of October. Thus, having all these technical signs in mind, we would consider the near-term outlook to be positive.
We believe that the break above 0.9475 may have opened the way for a test near the 0.9515 barrier, which is fractionally below the high of the 6th of September. If that hurdle fails to stop the bulls and breaks, then we may experience extensions towards our next resistance of 0.9560, defined by the high of the 27th of August.
Shifting attention to our short-term momentum studies, we see that the RSI rebounded and crossed back above its 70 line, while the MACD, already positive, has bottomed and just poked its nose above its trigger line. These indicators detect strong upside speed and support the case for AUD/CAD to keep traveling north for a while more.
On the downside, even if the rate falls back below 0.9475, we would still consider the near-term outlook to be positive. There would still be the likelihood for the bulls to take charge from near the aforementioned short-term uptrend line. We would like to see a clear break below 0.9410 before we assume that the bears have gained the upper hand, at least in the short run. Such a dip could initially aim for the 0.9355 support zone, the break of which could see scope for more downside extensions, perhaps towards the 0.9290 zone.
