- AUD/CAD is trading in an extremely narrow range, made an intraday high of 0.9910 and a low of 0.9887.
- The pair is extending consolidation ahead of the crucial Bank of Canada meeting due Wednesday.
- Markets have firm expectations for a rate hike. The recent employment report and the uptick in CPI inflation lifted the odds of an increase.
- The pair is struggling to break past major resistance at 200-DMA at 0.9907.
- 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.
- 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 negates bullish bias.
Support levels - 0.9875 (5-DMA), 0.9855 (channel top), 0.9823 (20-DMA)
Resistance levels - 0.9907 (200-DMA), 1.00, 1.0052 (61.8% Fib retracement of 1.0345 to 0.9579 fall)
Recommendation: Stay on the sidelines ahead of BoC. We expect some volatility into the meeting.
FxWirePro Currency Strength Index: FxWirePro's Hourly AUD Spot Index was at -7.30863 (Neutral), while Hourly CAD Spot Index was at -48.4205 (Neutral) at 0430 GMT. For more details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex.
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