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AUD/CAD Trading at Key Resistance

The AUD/CAD is consolidating roughly between 1.0105 and 1.0222. 


(audcad 4h chart, 5/12)

Consolidation Resistance: The market ended last week and is starting this week just under the 1.0222 resistance. If the market holds here, the prospect of further bearish correction is likely and the 1.0105-1.0140 consolidation support area is in focus again.

Bullish scenario: However, a break above 1.0225 first opens up the 1.0255-60 resistance pivot, then the 1.0350, 2014-high.  The prevailing trend before the 1.0350-1.0105 dip has been bullish, so the break above consolidation resistance signals bullish continuation.

 Above 1.0350, the next common resistance is around 1.0540 (refer to weekly chart below)

Bearish scenario: As noted before, resistance at 1.0222 keeps a bearish outlook alive, especially as the 4H RSI stalls at 60. If the RSI reading fails to break 60, it would reflect a bearish momentum developing in the 4h chart, intra-day time-frame. 

A break below 1.01 opens up
S1: 1.00,
S2: 0.9920, down to
S3: 0.9825.
This bearish scenario should be considered a bearish correction against the 2014 rally from 0.9410 to 1.0350. 38.2% retracement is at 0.9990, so monitor 0.9990-1.00 for major support. 

Again, this bearish scenario should be shelved away if the market breaks above 1.0225, which revives the prevailing bullish outlook.


(audcad weekly chart, 5/12)