AUD/CAD Buyers Seek to Establish a New Uptrend
Market Overview
AUD/CAD is attempting to stage a recovery after recent weakness, driven by renewed optimism in the Australian Dollar. Following a speech by Mr. Kent from the Reserve Bank of Australia, market sentiment improved as he downplayed the likelihood of aggressive rate cuts. Additionally, February’s building permits data showed a smaller decline than expected, supporting the Aussie.
Technical Analysis
On the two-hour chart, AUD/CAD shows signs of ending the downtrend that began in mid-March. After forming a higher low at 0.89698, bearish momentum has weakened, allowing buyers to challenge the key level of 0.90131. A successful break above this resistance would signal the start of a new uptrend and invalidate the previous bearish structure. Next, the pair would target resistances at 0.90251, 0.90402, and 0.90568.
Momentum indicators confirm the improving outlook. The RSI remains above 50, indicating growing buying pressure, while the MACD histogram shows rising positive bars, signaling renewed bullish sentiment. Conversely, if sellers regain control and push the price below 0.89698, the pair could resume the previous downward trend.
Key Technical Levels
- Resistances: 0.90251, 0.90402, 0.90568
- Supports: 0.89967, 0.89698
Fundamental Drivers
In the absence of high impact events for AUD, investors are awaiting Canada’s trade balance report on Thursday, which could introduce new volatility to the pair. The Canadian Dollar remains sensitive to oil prices, which have shown signs of stabilizing. Traders will closely watch Canada’s upcoming trade balance data, which could influence CAD pairs.
Conclusion
AUD/CAD is attempting to establish an uptrend, with buyers targeting 0.90251 and higher. A drop below 0.89698 would invalidate the bullish outlook.
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