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Fading risk sentiment has certainly taken a toll on the high-yielding Australian dollar over the past two months, and the lack of stability in the global financial market continues to favor a bearish outlook for the aussie.

Currency Pair: AUD/CAD
Chart: 60 Min Charts
Short-Term Bias: Bearish

Analysis

Fading risk sentiment has certainly taken a toll on the high-yielding Australian dollar over the past two months, and the lack of stability in the global financial market continues to favor a bearish outlook for the aussie. After peaking to 0.9846 on 7/15/08, we saw the AUDCAD plunge to 0.7152 on 10/8/08, but the pair bounced back to cross above the 38.2% Fib retracement level. Despite its attempt to move higher, the pair looks to have found resistance near 0.8498 (50% Fib retracement level), and looks to be working its way back to the downside. Over the last few hours of trading, the pair has fallen considerably to fill in the gap from the previous session, and I anticipate the downward momentum to drag the pair lower over the week. Be sure to check out other Technical Reports from DailyFX for additional information on the major currency pairs.

To contact the author of this article, please email: dsong@fxcm.com

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