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AUD/CAD Signals Bullish Continuation

After a bullish Q1, AUD/CAD retreated in Q2, from the 1.0350 high on the year to 0.9937 by the end of June. As we begin Q3 in July, price has rallied sharply, and is now pushing above the falling consolidation channel resistance. Also note price clearing above the 100-day simple moving average - price is now above the 200-, 100-, and 50-day SMAs. The RSI is pushing above 60, which signals loss of bearish momentum. These are all signs of a bullish breakout, and AUD/CAD is now opening up the 1.0242 and 1.0350 resistance pivots as targets.

(audcad daily chart 7/30)

Before we see price push toward the 1.0242 and 1.0350 pivots, we might have some pullback. The 4H chart shows that although price is turning bullish, there is an extended bearish divergence brewing. 

(audcad 4h chart 7/30)

If we do get a pullback, the 1.0100 area is key for support. This was a previous support/resistance pivot and likely reinforced by a rising trendline from July. A break below 1.0080 would clear below July's trendline and below the 200-, 100-, and 50-period SMAs. This would return the focus toward the 0.9937 low, with downside toward 0.99 if broken. The mode would be back to bearish correction/consolidation, instead of the currently suggested bullish continuation.

If price can stay north of 1.100 and the 4H RSI holds above 40, we should look for a bullish attempt to 1.0242 in the very short-term.