From Investor to Scalper – series of studies created in cooperation with broker BDSwiss, in which we take a financial instrument and the analysis includes a detailed look at the value from the monthly chart and ending with H4/H1.
AUDCAD since August 2013 is moving in a consolidation. It is worth noting that since September 2015, when market rejected its lower limit, bullish trend line has stopped supply before further declines.
Mentioned consolidation is well seen on weekly chart. It is worth noting that after each of the last three tests of the upper limit of this box, the subsequent falls were smaller.
On daily chart, we notice that last two waves of declines stopped in the area of 50% Fibo correction from earlier gains.
According to the box theory if once again market reaches level of 1.0330, we would expect we could break it and continue the upswing.
For market could reach upper limit of consolidation, first it would have to overcome local resistance at level 1.0160.
If this level will stop buyers before further growth, we expect we may experience at least a bearish correction and a re-test of the local support zone coinciding with the 50% Fibonacci correction.