AUD/CAD Is Shaping a Diamond at 0.8918

The Australian dollar versus the Canadian dollar currency pair gives some signs of bottoming around the 0.8900 psychological level.

Long-term perspective
After oscillating in the descending channel that started at the 0.9600 psychological level, the price seems to have found support at 0.8912.
The false piercing of the resistance line of the descending channel, along with the false piercing with the 0.8918 support level, leaves behind a price action that begins to shape a diamond. This kind of pattern usually signals a turn in the market.
Besides this pattern, noteworthy is that the price is contained in a consolidation phase limited by the 0.9010 resistance and the 0.8918 support. From this point of view, because of the low at 0.8835, it can be considered that the bulls had the power to push the prices away from an area where the bears were (or should have been) dominant.
In addition, it can be seen that the market prints higher lows and lower highs, a behavior that is a characteristic for the continuation patterns, and since that area is preceded by an upward pointing movement, the expectation is for it to be followed by a movement to the north.
So, in the context of this bullish profile, the first target is represented by the 0.9100 psychological level, a scenario that will materialize after 0.9010 is pierced and confirmed as support. A more aggressive approach is to wait for the high of October 21 to be taken out. In the long term, the target is represented by 0.9300.

Short-term perspective
The price is in a flat limited by 0.8872 and 0.9041. Within these limits, there is another smaller flat lined up by 0.8923 and 0.8985. Of course, the support levels of the bigger flat can be used to speculate movements in the short term, while the ones of the smaller one may give way easily and, as a consequence, are better to be ignored for the short term.
In exchange, the boundaries of the smaller flat are very useful to asses the overall profile. As the resistance is breached, the message is that the bears are less likely to be able to drive the prices lower.
Considering the discussion for the daily perspective, if 0.9041 is taken out, then the price can reach 0.9105.

Levels to keep an eye on:

D1: 0.8912 0.9010 0.9100 0.9300
H4: 0.8872 0.9041 0.8923 0.8985 0.9105


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Original from: www.earnforex.com