AUD/CAD 4H Chart: Channel Up

The Australian Dollar is gaining value against its Canadian counterpart in a short-term ascending channel, which represents a mirror image of a similar preceding descending channel. It should be noted that patterns, which were formed in the result of traders' reaction on some fundamental event, are usually unsustainable. However, a rebound in the early Monday's morning from the bottom edge of the formation, which was backed up by the 55-period SMA, shows that this channel is viable. Therefore, the pair is expected to surge until it encounters a combined resistance set up by the 20- and 200-period SMAs near 0.9983, which has a high chance to force it to make a u-turn. But even if it manages to bypass this barrier, the climb will be ultimately stopped by the weekly R1 and monthly PP at 1.0036. On the other hand, it is also possible that the rate will make a premature rebound from the weekly PP at 0.9956.