AUD/CAD looks set to break above a Double Bottom pattern!
Think we’ll see a bullish reversal in the next trading sessions?
Check out what’s cookin’ in AUD/CAD’s 4-hour time frame:
AUD/CAD 4-hour Forex Chart by TradingView
As you can see, the .8840 area served as support for AUD/CAD not once but TWICE in the last few days. In fact, the bounces formed a potential Double Bottom pattern in the 4-hour time frame with the .8900 psychological handle as the Double Bottom “neckline.”
Are we seeing a future bullish reversal over here?
Earlier today, the Australian dollar got a boost from speculations that China – Australia’s biggest trading partner – is consider a yuuuge fiscal package to help stabilize its financial markets.
Meanwhile, Libya restarting its oil operations and non-OPEC countries showing signs of increased production are limiting crude oil demand even amidst rising geopolitical tensions in the Middle East. Not good for our oil-related CAD!
Remember that directional biases and volatility conditions in market price are typically driven by fundamentals. If you haven’t yet done your fundie homework on the Australian and Canadian dollars, then it’s time to check out the economic calendar and stay updated on daily fundamental news!
A clear breakout above the .8900 “neckline” opens AUD/CAD to a move to the R1 (.8940) Pivot Point line or the .8950 area of interest. That’s also around where the bearish SMA crossover is on the chart!
On the other hand, a rejection at the neckline could drag AUD/CAD back to its previous lows near .8840. And, if we see a fundamental catalyst along with the rejection, then AUD/CAD may see enough bearish momentum to make new January lows.
What do you think? Which way will AUD/CAD go in the next couple of days?
