- AUD/CAD edges higher after holding 20-DMA support at 0.9908, break below likely to see weakness.
- We have evidenced a 'Bearish Doji Star' formation on daily charts which supports bias lower.
- The pair is consolidating massive slump of Friday last week after dovish RBA Deputy Governor Debelle's comments.
- Technical indicators are biased lower, the pair was rejected at trendline resistance, falls below 200-DMA.
- RSI has fallen below 50 Stochs are showing a bearish rollover from overbought levels.
- Break below 20-DMA could see further drag lower. Scope then for test of 0.9745 (major trendline).
- The main focus remains on Australia Q2 CPI data for further impetus.
Support levels - 0.9909 (20-DMA), 0.99, 0.9879 (23.6% Fib retrace of 1.03458 to 0.97348 fall), 0.9825 (weekly 200-SMA)
Resistance levels - 0.9968 (38.2% Fib retrace of 1.03458 to 0.97348 fall), 0.9979 (5-DMA), 1.0032 (200-DMA)
Recommendation: Go short on decisive break below 20-DMA, SL: 0.9970, TP: 0.99/ 0.9825/ 0.98
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