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Australian, Canadian Dollars May Turn Lower vs. US Counterpart

Australian, Canadian Dollars May Turn Lower vs. US Counterpart

Ilya Spivak, Head Strategist, APAC

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The Australian and Canadian Dollars have hit multi-month highs against the US Dollar but technical positioning hints a reversal may be in the cards ahead. The Aussie set an eight-month high above the 0.75 figure while the Loonie advanced to levels unseen since mid-November. In both cases however, RSI divergence hints at ebbing anti-USD momentum.

For USD/CAD, prices are hovering above critical support at a rising trend line set from July 2014. While an actionable bullish reversal signal is absent for now, this seems like a logical place for a reversal to emerge if the pair were to make good on RSI foreshadowing. The trend line is currently at 1.3197, with a daily close below this barrier invalidating the nascent setup.

Turning to AUD/USD, prices are sitting directly below major support-turned-resistance in the 0.7533-90 area. The region held up as support from mid-March to early July 2015. An eventual break opened the door for a decline of 8.5 percent. The barrier is now a kind of line in the sand: a break above would neutralize the near- to medium-term bearish bias. Like USD/CAD, this puts AUD/USD in an area where a reversal would be logical (although again, confirmation is absent thus far).

Read more here: AUD/USD Technical Analysis - Reversal Lower Hinted Ahead

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

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