The AUD/CAD pair initially fell during the session on Tuesday, but found the 0.9750 level as being supportive enough to push the market much higher. The breaking of the shooting star from the Monday session to the upside is of course a very strong sign, and as a result buying on a break of that candle was the original plan, and that is the one that I follow. I believe that this market will now try to grind its way back up towards the parity level, and I have to admit that I find it to be no coincidence that the Australian dollar broke the top of the shooting star against the US dollar during the same session as well.
Remember, the Federal Reserve has no say so in this market, so this is more or less a reflection upon the way gold is trading versus oil at the moment. Remember, the Canadians are heavily laden with oil, while the Australians are heavily laden with gold. In a lot of ways, traders will look at this chart as a tertiary indicator for the futures markets, as well as the Forex markets.
Large green candle shows impulsive move.
The large green candle that we saw for the Tuesday session of course shows an impulsive move, showing that real momentum has step back into this marketplace, propelling the Australian dollar higher. The Canadian dollar is on its back foot at the moment, and employment situation numbers in Canada have to be watched as well.
On top of that, keep in mind that the Australians are highly sensitive to economic numbers coming out of Asia, and thereby making it a bit of a proxy for playing Chinese growth. Going forward, I expect that any pullback at this point time should continue to offer buying opportunities, and as a result I will buy supportive looking candles on short term charts going forward as well. Do expect to see a significant amount resistance at the parity level though, as it is a large round psychologically significant number the traders tend to pay a lot of attention to.
