The AUD/CAD has been forming a classic pennant formation on the daily chart suggesting that a bullish continuation is on the horizon. The pair has been bearish since January but shifted to a more bullish sentiment on May 23 and has since retraced roughly 38.2% since. If the upper resistance level at 1.0245 breaks there is a very good possibility that this pair will continue along this bullish path towards the 50% (1.0369) or even 61.8% (1.0476) levels in the weeks ahead. Along the way there will be numerous areas of resistance such as the Monthly R1 (1.0243), Weekly R1 (1.02812) and Monthly R2 at 1.0243. An opposing scenario however is that prices break higher as an effort to fake out retail traders by seemingly confirming a long bias only to fall and turn Bearish. If price closes below 1.0160 there is a strong possibility that the Bearish trend we have been in for half of this year will resume, and support will be a key factor at 1.0090 which is both the Weekly S1 & Monthly Pivot, a strong level of Support indeed.
Happy Trading!