AUDCAD plummeted aggressively from 0.9250 after a two-week period of producing red candles. Following the fall from the previous swing high of July 23 into a one-month trading range, the upside pressure hit a ceiling at the 0.9050 level.
Positive momentum has picked up in the short-term. The MACD has distanced itself above its trigger line in the bearish region, and the RSI crossed marginally above the neutral level into bullish territory. Furthermore, the 21-day simple moving average (SMA) has started to reverse upwards also reflecting the pickup.
If the bears retake control and the 0.9050 level holds, the price could initially find support at the 21-day SMA around 0.8980, before falling to test the 0.8900 handle. If the bears manage to shove lower than the psychological 0.8900, the pair could see support come in at 0.8865 and ahead of the 0.8800 obstacle.
If the efforts of the bulls continue and they maneuver past the 0.9050 – 0.9060 congested resistance barrier, the pair could come to test the 0.9165 resistance, which is the 38.2% Fibo retracement level of the down-leg from 0.9613 to 0.8888. More importantly, the 50.0% Fibo of 0.9250 could unfold once surpassing the 100-day SMA currently around 0.9200.
Overall, the short-term traders are waiting for a break above 0.9050 or below 0.8900 to reveal the directional bias.
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