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AUD/CAD Confirms Bullish Breakout

Let's first review yesterday's AUD/CAD price action, which followed the Bank of Canada's monetary policy statement. The CAD gained after the statement and the AUD/CAD was threatening to break this week's rising channel, and signal a bearish continuation outlook.

Now, there was indeed further bearish action , but as we can see in the 4H chart below, traders eventually respected an earlier, broken falling trendline as support. 

AUD/CAD 4H Chart 9/10

(click to enlarge)

The rebound off the broken trendline can be assessed as a confirmation of the bullish breakout. Price action is already above yesterday's high and suggests that the AUD/CAD is in a reversal against its August decline. 

Some chartists will also see an inverted head and shoulders form, with today's price action completing the structure and threatening to break above the neckline. 

More evidence for the bullish reversal will be the RSI clearing 60, and price action clearing 0.94. These will be great confirmations as well, but perhaps, we already have some good evidence for the bullish reversal. In this bullish scenario, the first target can be the 0.95 support/resistance pivot, with a more aggressive outlook towards 0.96 and the 0.9675-80 highs from a previous consolidation range in August.