- AUD/CAD gained some positive traction on Wednesday, ahead of BOC policy decision.
- The pair has broken above 200-DMA resistance at 0.9906 and is currently trading at 0.9926.
- However, it remains to be seen if the pair is able to build on the up-move, bulls lack conviction ahead of BOC decision.
- Markets not fully priced in rate hike, so some uptick in CAD expected as an immediate reaction.
- Technical studies are bullish, RSI and Stochs are biased higher. We see +ve DMI dominance and ADX support for current uptrend.
- Price action has shown breakout above channel top at 0.9855, raising scope for further upside.
- Decisive breakout at 200-DMA could propel the pair higher, scope then for test of 61.8% Fib at 1.0052.
- On the flipside, retrace into downward channel and close below 5-DMA negates bullish bias.
Support levels - 0.9906 (200-DMA), 0.9892 (5-DMA), 0.9855 (channel top), 0.9826 (20-DMA)
Resistance levels - 1.00, 1.0052 (61.8% Fib retracement of 1.0345 to 0.9579 fall), 1.0074 (Aug 8 high)
Recommendation: Stay long on decisive close above 200-DMA, SL: 0.9890, TP: 1.00/ 1.0052/ 1.0074
FxWirePro Currency Strength Index: FxWirePro's Hourly AUD Spot Index was at 176.768 (Bullish), while Hourly CAD Spot Index was at -1.62378 (Neutral) at 0930 GMT. For more details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex.
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