The AUDCAD pair has been trading higher for the last several weeks now. The pair is now coming closer to a major resistance zone, as highlighted in the daily chart shown below. There are two trend lines meeting around the same zone, which suggests the importance of the highlighted area. I think we should search for sell opportunities in the short term.
There is wedge forming on the hourly chart, as shown below. There is also a support at around the 1.0190 level, which coincides with the wedge trend line. A divergence is also noted on the 4 hour chart. If the pair breaks the trend line and support level and closes below the same, then we can jump into a sell trade. Remember, wait for the pair to close below the trend line on the 4H timeframe and not on the hourly timeframe.
Initial target should be around the 1.0120 level, and final target could be around the 1.0050 level. Stop should be placed above the broken trend line and support level.
Reviewing yesterday’s events and trades
Yesterday, in the European session, the German, French and Euro zone composite Flash manufacturing and services PMI figures were released. The French manufacturing and services PMI jumped higher, and registered a massive growth rate. On the other hand, there was a minor decline noted for the Germany and Euro zone. Overall, the data was on the positive side. Later, during the NY session, the US manufacturing PMI was released, which dipped to 55.5 from 57.1. The US dollar traded lower after the release, as the EURUSD and AUDUSD jumped higher.
Fundamental Outlook for the day
Today a lot of fundamental data will be released in the EU and NY session. The main event during the EU session will be the UK inflation data, which might well ignite a rally in the GBPUSD pair if data comes out well. Later, during the NY session, the US new home sales data, CB consumer confidence and house price index data will be published. The ECB President Mario Draghi will also be speaking later during the day. So, a lot of action is expected, as the investors will be watching all these events closely. Any of these events might ignite volatility in the market.
This analysis is taken from today’s Daily Market Forecast, which also includes trade opportunities on: EURUSD, EURGBP, USDCAD, NZDUSD, EURAUD and EURJPY.
Get it HERE: Vladimir’s Markets Forecast
Have a great week friends. Happy trading!
