Daily Forex Update: AUD/CAD

By: Dima Chernovolov

AUD/CAD continues to fall after the earlier breakout of the Key Support level 1.0160, which was previously identified by Autochartist on the 4-hour charts. Autochartist rates the Significance of this Support level at the 6-bar level – which is the result of the six previous price reversals from this price level. AUD/CAD is expected to fall toward the forecast price 1.0085 – continuing the active downward correction from the powerful resistance area descried below. 

As can be seen from the daily AUD/CAD chart below, the breakout of this Support level continues the active daily correction from the strong resistance zone lying between the long-term resistance level 1.0330 (which also reversed the price in November) and the upper daily Bollinger Band.  The downward reversal from this resistance zone created the daily Japanese candlesticks reversal pattern Bearish Engulfing. The proximity of this resistance zone increases the probability AUD/CAD will continue to fall toward the forecast price 1.0085.

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