AUD/CAD is currently testing a falling trend line on its 1-hour time frame, as it has pulled up after reaching the 1.0150 minor psychological support. The pair could now find resistance at the 38.2% to 50% Fib levels, which are close to the 1.0200 major psychological resistance.
Stochastic has already reached the overbought zone, indicating that buyers are exhausted. However, selling pressure hasn’t mounted yet as the indicator hasn’t crossed down from the 75-80 levels.
Shorting at the 1.0200 mark with a stop above the trend line or 61.8% Fibonacci retracement and a target of new lows could yield a good return on risk. Moving the stop to entry once price tests the latest lows at 1.0150 could be a good way to reduce exposure.
By Kate Curtis from Trader’s Way