Daily Analysis: Eyeing AUDCAD to form a top for a sell opportunity

Today, let us discuss about AUDCAD, which I think may form for a top soon and move lower again. The pair is forming a bearish hidden divergence on the weekly chart as shown below. So, I think we should be looking for sell opportunities in the short term.

There is a beautiful up-move channel formed on the 4 hour chart as shown below. The pair is currently moving towards the top of the channel. If the pair reaches the top of the channel, creates a divergence on the 4 hour chart and forms a bearish candle pattern on the 1 hour chart, then we will enter a sell trade. Levels such as 0.9880, .0.9920 and 0.9950 should be watched closely for the entries.

Alternatively, if the pair does not rise to the upside, then we may enter a sell trade in a conservative way. There is a minor trend line on the 4 hour chart as well. If the pair breaks the trend line and support, holds below it, then we can jump into a sell trade as well.

Initial target would be the bottom of the channel and final target could be a bit lower if channel breaks at around 0.9650/00. I think in longer run, the pair should break the channel and move lower. Stop should be placed above the channel resistance in both the cases.

Reviewing yesterday’s events and trades
BOE kept the interest rates and asset purchase program unchanged as expected in the release yesterday. GBPUSD is finding some bids as the bearish pressure eases a bit. Yesterday, US initial jobless claims data was also released, which rose sharply to 374K from the previous reading of 308K. Market was expected it around 310K. Jobless claims registered one of the biggest rise in past some months, which caused US dollar to step back. Risky assets like indices, AUDUSD and NZDUSD are finding some bids overnight.

Fundamental Outlook for the day
Canadian employment data is scheduled later in the NY session, and market is expecting a drop in the unemployment level. If the data does not disappoint, then Canadian dollar may find some bids later in the day. Other than this, Michigan Consumer sentiment is also lined up with the expectations of a decline to 76.0 from 77.5. Later on, Chinese exports, imports and trade balance data will be released. Let us see how the market shapes up going into the weekend. As usual, do not try to force any entry friends, stay away if not sure about the entry.

This analysis is taken from today’s Daily Market Forecast, which also includes trade opportunities on: EURUSD, GBPUSD, AUDNZD, USDJPY, GOLD, DOW JONES and S&P500.
Get it HERE: Vladimir’s Markets Forecast

Happy Weekend friends. Enjoy!