Dovish RBA and higher oil prices add further downside pressure on AUD/CAD

AUD/CAD may kick-start another potential downleg sequence at this juncture.

Short to medium-term technical outlook on AUD/CAD



click to enlarge charts

Key Levels (1 to 3 weeks)

Intermediate resistance: 0.9080

Pivot (key resistance): 0.9140

Supports: 0.8995 & 0.8905

Next resistance: 0.9330

Directional Bias (1 to 3 weeks)

Bearish bias below 0.9140 key medium-term pivotal resistance for another potential downleg sequence to target 0.8995 follow by the recent range support of 0.8905 (swing low areas of 07/30 Aug) in the first step.

On the other hand, a clearance with a daily close above 0.9140 invalidates the bearish scenario for a continuation of the corrective rebound in place since 07 Aug 2019 towards the major resistance of 0.9330 (50% Fibonacci retracement of the major downtrend from Nov 2018 to 07 Aug 2019 low & upper boundary of the major descending channel from Mar 2018 high).

Key elements

  • The recent 256 pips rebound from its 07 Aug 2019 low of 0.8869 has stalled at the upper boundary of a medium-term descending channel from 17 Apr 2019 high of 0.9615.
  • The medium-term descending channel resistance of 0.9140 confluences closelywith a Fibonacci cluster; 38.2% retracement of the medium-term downtrend from 17 Apr high to 07 Aug 2019 low and 1.382 projection of the recent rebound from 07 Aug low to 08 Aug high projected from 30 Aug 2019 low.
  • The 4-hour RSI oscillator has staged a bearish breakdown from a significant corresponding resistance after it hit an extreme overbought level on 13Aug 2019. These observations suggest the revival of medium-term downside momentum in price action.

Charts are from eSignal


Disclaimer

This report is intended for general circulation only. It should not be construed as a recommendation, or an offer (or solicitation of an offer) to buy or sell any financial products. The information provided does not take into account your specific investment objectives, financial situation or particular needs. Before you act on any recommendation that may be contained in this report, independent advice ought to be sought from a financial adviser regarding the suitability of the investment product, taking into account your specific investment objectives, financial situation or particular needs.

StoneX Financial Pte. Ltd., may distribute reports produced by its respective foreign entities or affiliates within the StoneX group of companies or third parties pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the report is distributed to a person in Singapore who is not an accredited investor, expert investor or an institutional investor (as defined in the Securities Futures Act), StoneX Financial Pte. Ltd. accepts legal responsibility to such persons for the contents of the report only to the extent required by law. Singapore recipients should contact StoneX Financial Pte. Ltd. at 6826 9988 for matters arising from, or in connection with the report.

In the case of all other recipients of this report, to the extent permitted by applicable laws and regulations neither StoneX Financial Pte. Ltd. nor its associated companies will be responsible or liable for any loss or damage incurred arising out of, or in connection with, any use of the information contained in this report and all such liability is hereby expressly disclaimed. No representation or warranty is made, express or implied, that the content of this report is complete or accurate.

StoneX Financial Pte. Ltd. is not under any obligation to update this report.

Trading CFDs and FX on margin carries a high level of risk that may not be suitable for some investors. Consider your investment objectives, level of experience, financial resources, risk appetite and other relevant circumstances carefully. The possibility exists that you could lose some or all of your investments, including your initial deposits. If in doubt, please seek independent expert advice. Visit cityindex.com.sg for the complete Risk Disclosure Statement.