RBC Technicals Recommend Short AUD/CAD

RBC’s technical analysis team have recommended selling AUD/CAD at C$0.9080 and look to add further on a move to C$0.9225. The trade has a target of C$0.8900 and a stop loss set at C$0.9250.

• They note that the “last major rally in AUD/CAD stalled just above C$0.9516 in January, effectively forming a potential double top against this level.”
• “The subsequent selloff triggered a bearish trend reversal below C$0.9372 in early February which extended the decline toward the December low at C$0.9043.”
• “We note that the most recent advance peaked at C$0.9236, leading to the formation of a potential head and shoulders topping pattern in the process.”
• “With today’s break below C$0.9128 completing a bear flag pattern, prices are set to re-test neckline support at C$0.9043.”
• “A daily close below this level would confirm the head and shoulders top, with the breakdown targeting C$0.8958 and C$0.8866 thereafter.”
• “Additional support comes in at C$0.8775 and C$0.8663.”
• “If the head and shoulders pattern is valid, then rallies to resistance at C$0.9128 and C$0.9236 should attract selling interest.”