Time Zone: GMT +2
Time Frame: 4 Hours (H4)
Fundamental Analysis:
The Australian Dollar (AUD) and Canadian Dollar (CAD) currency pair is influenced today by key economic events. The Reserve Bank of Australia (RBA) has released its Monetary Policy Statement, alongside a Press Conference scheduled for later. Additionally, the Cash Rate decision has been announced, reflecting a shift from 4.10% to 4.35%, indicating a tightening policy stance to control inflation. These factors could add volatility to the AUD. Meanwhile, Canada’s Consumer Price Index (CPI) figures were released, showing a mixed outcome: CPI m/m increased by 0.1% (previous: -0.4%), while Core CPI m/m declined to -0.3%. A higher inflation rate could push the Bank of Canada (BoC) toward a hawkish stance, strengthening the CAD. As a result, AUD-CAD traders should remain cautious as the market digests these key data points, which could set the tone for further price movement.
Price Action:
The AUDCAD H4 chart indicates that the price has recently broken below its bullish trendline, signaling potential exhaustion in the prior uptrend. This suggests that buyers are losing momentum, allowing sellers to take control. The price is currently positioned beneath a key resistance level at 0.90500, with additional resistance barriers at 0.90590 and 0.90900. Recent candlestick formations near these resistance zones show rejection, reinforcing the likelihood of a bearish reversal. If the price fails to break back above these resistance levels, selling pressure could intensify, leading to a deeper decline. On the downside, immediate support levels to watch are 0.89750, 0.89360, and 0.89000, which could serve as price targets if the bearish momentum strengthens. These levels have historically acted as demand zones, where buyers may step in to slow the decline. However, a decisive break below these supports could accelerate selling pressure, pushing AUD/CAD even lower. Given the trendline break and resistance rejection, traders should closely monitor price action for further bearish confirmation.
Key Technical Indicators:
MACD (Moving Average Convergence Divergence): The MACD indicator is still in a bullish phase, with the MACD line above the signal line and histogram bars expanding. However, if a crossover occurs, it could confirm the bearish momentum indicated by price action.
RSI (Relative Strength Index): The RSI is currently at 58.65, indicating a slowdown in bullish momentum. The RSI has recently turned bearish, suggesting the possibility of a downward correction or consolidation below key resistance levels.
Support and Resistance:
Support: The nearest support level is positioned at 0.89750, with stronger support zones found at 0.89360 and 0.89000. These levels align with previous key price action areas where buyers have historically stepped in, potentially providing a floor for the price if the bearish momentum slows.
Resistance: The immediate resistance level stands at 0.90500, with additional key resistance zones at 0.90590 and 0.90900. These levels have previously acted as significant barriers, where selling pressure has emerged, making them critical points for any potential bullish recovery attempts.
Conclusion and Consideration:
The AUD CAD pair is currently at a critical decision point, trading just below a key resistance level while showing signs of potential downside movement. The MACD remains bullish, but the RSI has turned bearish, indicating possible exhaustion in the uptrend. With today’s high-impact news events, including the RBA Policy Statement and Canadian CPI Data, traders should expect heightened volatility. A confirmed break below 0.90000 could accelerate a bearish wave toward 0.89750 and further support zones. Conversely, a break above 0.90590 could renew bullish momentum toward 0.90900.
Disclaimer: The analysis provided for AUD/CAD is for informational purposes only and does not constitute investment advice. Traders are encouraged to perform their own analysis and research before making any trading decisions on AUDCAD. Market conditions can change quickly, so staying informed with the latest data is essential.
