Chart of the Day: AUD/CAD

[DailyFx]

Continued uncertainty about the strength of the USD leads us to once again look at the exotic pairs to find a potential trading opportunity. These are the currency pairs that do not include the USD which limits the influence of the current financial market volatility on this pair.

The AUD/CAD is still showing a downtrend on the daily chart which means that we should be looking at selling opportunities only on the intraday chart. Here we see the 4-hour chart showing a move up against the trend, so we look for a sign that sellers are coming back into the market before entering into our trade. The signal to enter into the sell is after the MACD line (green line) crosses below the MACD Signal line (black line). We could then place our stop above the recent high which gives us our risk on the trade. We should then look for at least two pips in potential profit for every pip we are willing to lose for our 1:2 risk:reward ratio.