The Australian dollar versus the Canadian dollar currency pair seems to have ended the descending period and is now looking for extensions on the upside.
Since the confirmation of the 0.9583 resistance level, the price has been contained by the descending channel. But the previous week put an end to the decrease — at least for the moment — as the price pierced the resistance line of the channel.
The piercing came after the formation of a double bottom and peaked at 0.9143. Such a piercing requires the confirmation of a support in order to continue. So, the price could either consolidate in an area limited by the peak of 0.9143 as resistance and a still to be etched support (maybe 0.9065) or make a downwards leg to confirm 0.9023.
The main — and for now only — target after such a development would be the 0.9200 psychological level with the technical correspondent 0.9222, a place from where a lot of bearish pressure is expected to unfold.
The price pierced the resistance marked now by the 38.2 level of the Fibonacci retracement, extended to 0.9147, and then gapped under 0.9118, stopping at the 23.6 projection.
It is expected for the price to appreciate later on just to close the gap. After that, there are two major possibilities.
The first one is for a consolidation limited by the Fibonacci projections of 0.0 and 23.6, respectively. The lower boundary could be breached for a brief period, giving the price a chance to confirm 38.2.
The second possibility is for the 0.9147 level to be crossed and confirmed as support, leading the way to 0.9189 and 0.9238, respectively. These two levels also represent targets for the first scenario and, as discussed for the daily chart, are packed with sellers just waiting to unleash their positions at a very competitive price.
Levels to keep an eye on:
D1: 0.9023 0.9104 0.9222
H4: 0.9000 0.9147 0.9189 0.9238 and the Fibonacci retracement levels (mainly 38.2 23.6 and 0.0)
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