The Australian dollar (AUD/CAD) rate has been steadily rising recently. However, the bullish momentum has expired and the quotations have changed direction. The downward movement, however, can only be a correction in the wider upward trend. The bulls are now facing the downward trend line, which must be overcome in order for AUD/CAD to continue the trend.
- The general trend in the chart favors buyers
- After testing the support area at 0.9400 the price reached the trend line
- Overcoming the trend line would open the way to 0.9655
Bulls on AUD/CAD test the downward trend line
As can be seen in the AUD/CAD daily chart below, the quotations consolidated for more than a month under resistance at 0.9400. After the area was hit in July, the Australian dollar established its peak at 0.9695.
The bounce after the peak set the price back to the area at 0.9400 CAD, which now works as support. This area was successfully tested during Friday’s session.
Today, the bulls face a downward trend line from this year’s peaks. If they manage to overcome this line, the AUD/CAD course can again head to the resistance zone at 0.9655.
Alternatively, an effective downward break-out under 0.9400 would open the way to support at 0.9270.