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AUD/CAD Threatens to Break Falling Resistance

AUD/CAD does not have a strong trend. In the 4H chart, we can see a choppy market, which had some bearish bias since a high of 0.9858. At the end of last week and at the beginning of this one, price action is testing the falling trendline since that high in February. 

AUD/CAD 4H Chart 3/16
(click to enlarge)

I believe it will break above the falling channel resistance. First of all, there is no prevailing trend to speak of. Even though there was a slight bearish bias since mid/late February, we don't have to respect that, especially with price already back above the 200-, 100-, and 50-period SMAs and with the RSI already having broken above 60, which shows loss of the prevailing bearish momentum.

For now, the market is still respecting the trendline, but as long as price can hold above 0.9720, the pressure remains at the 0.98 handle. A break above 0.98 would confirm the near-term bullish outlook, which first opens up the 0.9858 high.

AUD/CAD Daily Chart 3/16

(click to enlarge)

When we look at the daily chart, we also see a market that has no real direction, though we can say there is a slight bearish bias since  April 2014. You can't see it in this chart, but there was a slide from a high around 1.0350. 

However, there is a bullish bias since the end of the year, as AUD/CAD tried to push back above the moving averages. It has not done so yet, but price found support at 0.96 and is trying to at least not fall under the SMAs. Furthermore, the daily RSI has tagged above 70 and is now holding above 40, which shows maintenance of this nascent bullish momentum.

While there is a resistance seen in teh 4H chart, the technicals in the 4H and daily chart suggests that we will probably see it break this week, with upside risk towards the 1.00 handle in the short to medium-term (couple of weeks).