The Aussie inched higher against the Canadian dollar on Friday, taking the price to more than 0.9480 ahead of Canada inflation data. The upward movement is right in line with expectations that are developed after the emergence of bullish pin bar on the daily chart yesterday. Investors however look cautious ahead of key releases.
As of this writing, the AUD/CAD is being traded around 0.9463. The pair opened the Asian session at 0.9449 and moved higher to 0.9481. On the upside, a resistance can be noted around 0.9522, the swing high of yesterday. Breaking this hurdle will allow the pair to test the next resistance that lies around 0.9564, the 23.6% fib level, exposing its way towards 0.9647, the confluence of trend line and 38.2% Fib level, as demonstrated in the following chart.
On the downside, an immediate support can be noted around 0.9440, the psychological number and swing low of the last bearish rally. The said level has been stalling the price of AUD/CAD for the past few days and is expected to support the pair in near future, as demonstrated by the descending trend line in the above chart.
The long-term bias however is bearish because of lower lows and lower highs on the daily chart. The bias is expected to remain bearish as far as the 0.9913 resistance zone is intact.
Canada Inflation Data
The consumer price index, the major indicator of inflation, remained 2.2% as compared to 2.4% in the same month of the year before, says the average forecast of different analysts. Generally speaking a high reading is considered bullish for the Canadian dollar, thus a better than expected actual outcome may spur a renewed selling pressure in the price of AUD/CAD.
The retail sales figure remained at -0.2% this October, below than 0.8% of the month before, as per the median projection of different analysts. Generally speaking, a positive reading is considered bullish for the Canadian dollar. Thus a better than expected actual outcome will exert a bearish pressure on AUD/CAD.
In the light of technical and fundamental analysis, buying the pair on a breakout through the trendline resistance appears to be a good strategy in short to medium term.
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