AUD/CAD traded higher today, after it hit support slightly above the 0.9135 barrier, marked by Friday’s low. Overall, the rate largely remains above the upside support line drawn from the low of January 28th, but before we get confident on more upside extensions, we would like to see a clear break above the key resistance territory of 0.9240.
That territory was tested back on January 5th, but also last week, on Wednesday and Friday. Thus, a break higher will confirm a forthcoming higher high and may pave the way towards the 0.9305 zone, marked by the high of December 30th, the break of which could aim for the 0.9330 zone, which acted as a temporary ceiling between October 27th and 29th. If the bulls are not wiling to stop there, then we may see them pushing towards the 0.9375 territory, marked by the highs of September 8th and 9th.
Taking a look at our short-term oscillators, we see that the RSI rebounded and crossed back above its 50 line, while the MACD, although fractionally below its trigger line, lies slightly in the positive territory and looks ready to cross back above the trigger soon. Both indicators suggest that the rate may have started gaining upside speed again, which adds to the chances of further advances in the short run.
Now, in order to turn our gaze to the downside, we would like to see a decisive dip below the 0.9135 barrier. This may not only confirm the break below the upside line, but it will also confirm a forthcoming lower low on both the 4-hour and daily charts. The bears may then get encouraged to push the action towards the 0.9055 zone, marked by the low of February 15th, the break of which could see scope for extensions towards the 0.9010 barrier, marked by the lows of February 4th and 7th, or towards the psychological round number of 0.9000.
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