AUD/CAD traded lower on Friday, falling once again below the lower end of the sideways range that had been containing most of the price action since May 21. The pair violated that barrier again on Wednesday, but it was quick to return within the range on Thursday. Anyhow, given that it is now trading back below that bound, we will consider the short-term outlook to be cautiously negative.
If the bears are willing to stay in the driver’s seat , we would expect them to soon reach the 0.9200 territory, which is defined as a support by the inside swing high of May 26, 2020, and is also fractionally above the low of June 2, that year. If that barrier fails to hold, then its break may see scope for extensions towards the 0.9130 territory, which stopped the rate from moving lower back between May 21 and 25, 2020.
Shifting attention to our short-term oscillators, we see that the RSI slid and got closer to its 30 line, while the MACD lies below both its zero and trigger lines. Both indicators detect strong downside speed. However, the RSI has just ticked up, which makes us careful over a possible rebound before the next leg south, perhaps for the rate to test the lower bound of the aforementioned range as a resistance this time.
On the upside, we will start considering the bullish case only if we see the rate overcoming the upper end of the range, which is at 0.9390. Again, such an exit happened last Monday, but lasted only for a few hours. If this time the bulls are willing to hold and increase their positions, we may see advances towards the 0.9430 zone, marked by the high of May 14. If that hurdle is also broken, then we could see the rate climbing towards the 0.9470 level, or the 0.9500 zone, defined by the inside swing low of May 10, and the high of the same day respectively.