AUD/CAD Extends Rally, Hits Two and a Half Year High

Monday Market Overview:

The Australian dollar (AUD) is significantly influenced by commodity prices, particularly metals, while the Canadian dollar (CAD) is heavily impacted by oil prices. Despite weaker-than-expected data from China and general dollar strength, the AUD has seen increased demand over the CAD in the short term. Stability in oil prices has provided some support for the CAD, but rising metal prices could further bolster the AUD.

Technical Analysis:

On the four-hour chart, the AUD/CAD pair continues its ascent, breaking above the key resistance level of 0.92532. This breakout has set buyers on a new bullish trajectory, with the strong upward momentum indicated by the RSI and MACD focusing market attention on 0.92665 and 0.92757—aligned with the 127.2% and 161.8% Fibonacci extension levels. A successful breach of these levels could see the prices challenge the next major resistance at 0.92896.

Alternative Scenario:

If buyers lose momentum and sellers manage to pull the price below the broken resistance at 0.92532, attention will shift to the support levels at 0.92393 and the critical low at 0.92168. A break below this latter level, coinciding with the 34-period moving average, would indicate a bearish shift.

Key Levels:

Resistance Levels:

• Resistance 3: 0.92896
• Resistance 2: 0.92757
• Resistance 1: 0.92665

Current Price (at the time of analysis): 0.92571

Support Levels:

• Support 1: 0.92532
• Support 2: 0.92393
• Support 3: 0.92168

Impactful Events:

Beyond the Canadian wholesale and industrial production reports on Monday, key economic data later in the week—including Australian employment statistics, Canadian inflation data, and oil inventory changes—could drive volatility in the AUD/CAD pair.

Oscillators and Risk Warnings:

RSI (Relative Strength Index): Bullish, indicating strong buying momentum.

MACD (Moving Average Convergence Divergence): Bullish, supporting the upward trend.

Moving Averages: Bullish, reflecting the current positive price action.

Conclusion:

The AUD/CAD pair is on a robust upward trajectory, breaking key resistance levels and aiming for further gains. A continued rise past 0.92665 and 0.92757 could propel the price towards 0.92896, marking a significant bullish move. However, if sellers regain control and push the price below 0.92532, the focus will shift to support levels at 0.92393 and 0.92168, indicating a potential bearish reversal.

Investors should monitor upcoming economic data from Canada and Australia, as well as commodity price trends, to gauge the likely direction of the AUD/CAD pair. Staying attuned to these key events and technical levels will help traders navigate the current market environment effectively.