Trend warriors huddle up!
AUD/CAD had a solid week, bouncing from its .8850 lows and inching closer to the .9000 mark today.
Will the pair face strong selling pressure at this level? Here’s why the potential resistance zone has our attention:
AUD/CAD 4-hour Forex Chart by TradingView
If you checked out our FX Weekly Recap, you’ll know that the Australian dollar found support last week from easing China growth concerns, upbeat domestic data, and growing optimism that the Fed may signal early rate cuts in 2025.
Meanwhile, the Canadian dollar softened alongside crude oil prices after ceasefire talks in Gaza weighed on the oil markets.
Remember that directional biases and volatility conditions in market price are typically driven by fundamentals. If you haven’t yet done your homework on the Australian and Canadian dollars, then it’s time to check out the economic calendar and stay updated on daily fundamental news!
AUD/CAD, which has been in a downtrend since September last year, found support at its .8850 January lows and is now trading closer to the .9000 psychological handle.
As you can see, .9000 has been a key battleground for AUD/CAD bulls and bears since December.
This week, .9000 aligns with several notable technical levels: the 4-hour chart’s 200 SMA, the R1 (.8999) Pivot Point line, and the resistance of a descending channel that has held since September.
Are we looking at a trend continuation setup?
Keep an eye out for long wicks or bearish candlesticks near the psychological level. These could attract enough sellers to maintain bearish momentum.
If AUD/CAD faces rejection at .9000, we might see a pullback toward the .8900 zone, which aligns with the 100 SMA and Pivot Point (.8926). Stronger bearish momentum could even bring the pair back to its previous lows around .8850.
On the flip side, if the Aussie keeps gaining on the Loonie, a sustained break above the .9000 level could open the door for a rally toward the R2 (.9041) Pivot Point area or even the .9100 previous inflection point.
Whichever bias you end up trading, don’t forget to practice proper risk management and stay aware of top-tier catalysts that could influence overall market sentiment!
