AUD/CAD Market Analysis “Asia Session”.

Daily watch-list on AUD/CAD, the Falling channel seems to be on a breakout, Pair makes Equal lows on key support level 0.19200. Will the pair break out of the falling channel or rally down as usual? Read through.

Economic News on AUD

Consumer Price Index (CPI )q/q:

This measures the change in the price of goods and services bought by consumers.
Although this data is extremely late relative to inflation data from other countries, it’s the primary indicator of consumer prices and tends to produce hefty demand impacts, Consumer prices regard for a majority of overall Inflation.

Inflation is important to currency valuation because rising prices lead the central bank to raise interest rates out of respect for their inflation constraint authorization,
It is released quarterly about 25 days after the quarter ends, If the’ actual’ result is greater than the ‘Forecast’ good for the currency.

Currency	Forecast	Previous
AUD	0.8%	0.8%

Trimmed Mean CPI q/q

It measures a change in the price of goods and services purchased by consumers, excluding the most volatile 30% of items
Data represents the underlying inflation trend through component weighting and anomaly exclusion.
Consumer prices account for a majority of overall inflation.

Inflation is important to currency valuation because rising prices lead the central bank to raise interest rates out of respect for their inflation containment mandate.
This is released quarterly, about 25 days after the quarter ends, if ‘Actual’ is greater than ‘Forecast’ then good for the currency.

Currency	Forecast	Previous
AUD	0.5%	0.5%

AUD/CAD Observation

Firstly From the Daily Chart, it is clear that Aud/Cad pair has been trading on a falling channel from the start of the first quarter(Q1) therefore making Lower highs(LH) and lower lows(LL).

AUD/CAD

During the third quarter, the pair rallied down from key price level 0.93500 to key level 0.91200 around 230 pips where it made a peak formation low(PFL), However, the pair bounced off the price level 0.91200 back to 0.93500.

Pair at the end of third quarter rallied back down making an equal low which in most cases is considered as a chart pattern “double bottom” if spotted at the bottom of the market.

Technical Indicator

AUD/CAD

From the daily chart using the help of a stochastic technical indicator we closely observed that the SMA’s is already on the over-bought level while the pair is on the resistance zone of the Falling channel, Here the stochastic indicator may not be of help.

We may consider paying close attention to Economic data release/News on both pairs and the market behavior on the following pairs as they are weak positively correlated “USD/CAD” and strong positively correlated “AUD/USD”.

Conclusion

On the 1 hour chart, Aud/Cad pair is in the formation of a chart pattern known as a falling wedge which is speculated by technical traders to be a continuation chart pattern, The pair is likely to break out and find its way to the 0.93500 level.

However, it calls for a short-term buy on the pair. Do you have any contributions pls let us know in the comment session and visit the forum for more discussion.