AUD/CAD Hits Key .9460 Resistance

Last updated 2/26/2010 11:33 AM EST (GMT -5) 2 Comments

FX360 Technical Analyst Staff

Technical Analyst, GFT

The AUD/CAD selling opportunity based on an emerging 8hr bearish Gartley pattern has been triggered although moderate warning sign is present. The original stop placement has accounted and allowed room for this but entry based by the following fib/pattern convergence....

· 61.8% of XA

· 127.2% of BC

· AB=CD

Additional confirmation comes in the recent dip as a newly developing ABCD confirmation pattern is also projected to complete near .9460. Watch out for any gaps and/or wide-ranging candles (2-3x's average) prior to the projected entry as these are signs that a continuation move may be in progress, which may invalidate this particular entry, which in this case may be pushed up to secondary pattern completion just below 78.6% of XA.  The stop-loss of .9554 placed just above secondary projected pattern completion takes this into account.  A move above this level without a correction down to the break-even point of .9391 would result in pattern failure thus increasing the odds of a potentially strong bullish continuation up to 127.2% of XA near .9700.

The initial profit target of .9321 represents a 78.6% retracement/correction of the projected CD leg as well as 61.8% of AD. An extended target of .9088 may come into play depending on price action prior to reaching the initial .9321 target.

Potential strategy: Sell if prices rally to.9454 with stop-loss of .9554 targeting .9321 (stop to break-even at .9391).

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  • 8hr Chart - BEFORE
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  • 8hr Chart - CURRENT

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Comments (2)

enslinFX

February 26, 2010 at 02:25 PM ET

I've been waiting for this trade for the last couple of days - so far so good. It retraced nicely after testing the bearish daily channel - 40 pips inside an hour and I suspect there's more downside to come. Nice way to end a rather awkward week of trading.

enslinFX

March 01, 2010 at 08:52 AM ET

Subsequent increase in Canadian GDP (5% vs 4% estimate) helps .... Got a suspicion that RBA might keep rates steady this evening... If this is the case deeper decline should be seen

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