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AUD/CAD has returned to previous levels after a sharp drop in the middle of the last week, and is narrowing its trading range and has formed a Rising Wedge pattern on the 1H chart. The pattern has 75% quality and 49% magnitude in the 58-bar period.
The pattern started when the pair rebounded from 1.0490 and after testing pattern's support band at 1.0472 and 1.0493 it slowed down at 1.0510 where the pair is currently trading. Technical indicators on aggregate send very strong buy signal on 4H outlook. Long traders could set the first target at the recent peak at 1.0517. If this level is breached, next targets could be at the recent pattern's resistance test level at 1.0534 and, if the pair gains momentum, at the patterns resistance band at 1.0539.
Technical indicators on aggregate point at depreciation of the pair on 1H outlook indicating that the pair will continue to move towards pattern's support. The SWFX market sentiment shows that 65% of traders expect such development as well. Short traders should focus on the pattern's support band at 1.0506. If this level is breached, next targets could be at the recent pattern's resistance test level at 1.0493 and at SMA200 1.0482.
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