© Dukascopy Bank SA
Late last year AUD/CAD bottomed out near 0.94 and since then has been in a distinct up-trend. However, it must be noted that at the same time the trading range has been gradually narrowing, meaning the currency pair has been forming a rising wedge since the beginning of 2014.
Accordingly, there is a growing probability that the lower boundary of the pattern, namely the up-trend support line at 0.9932, is likely to give in to the selling pressure eventually, which could lead to a precipitous decline, potentially down to 0.94. However, neither technical indicators, nor market sentiment (57% of open positions are long), do not support a bearish outlook at the moment.
© Dukascopy Bank SA