AUDCAD Top-Down AnalysisHello Traders,
Here is the Top-Down Analysis of AUDCAD (Monthly, Weekly, Daily for direction and 4H for entry) for
Week 42 - 12 Oct
M > Market reached resistance level that had pushed price way down last time, price is now moving down for correction. We can see W formation and expect drop to test the neck. Placing FIB on last monthly bullish impulse we can expect correction till 0.382 level which is beyond neck of W, our target.
W > Price has made 3 attempts to break monthly resistance and after failing moved down creating two LL. Placing FIB on last major weekly bullish impulse we can see that price dropped till 0.618 level (1st LL) and moved up to test weekly resistance again. We are in a bearish trend and have target as neck of W formation, however we have weekly demand zone on way down and can set this level as our 1st target and neck of W formation as our 2nd target.
D > We saw an M formation and after creating 2nd LL price moved up to complete the formation, we expect continuation of bearish trend. However price failed to break support level and moved upwards after rejection.
As per COT AUD saw closure of major Long and addition of few Short positions, reducing net positions, N-R saw closure of both Long and Short positions and Commercials saw addition of Long and closure of Short. AXY was weak for the said week however it improved its position last week. CAD saw closure of both Long and Short positions, N-R saw addition of Long and Short positions and Commercials saw closure of both Long and Short, confirming weakness of CAD for the said week. CXY gained strength last week.
Price is failing to continue with bearish move because of weak CAD, unless CAD gains strength AUD will continue to dominate this pair.
4H > Price made 3 attempts to break support level and has failed. In short term price can move up to test daily supply zone and after capturing more liquidity can make another attempt to the downside.
Recommendation > Price can move up, about 50 pips to test supply zone, hence short term target is Long but long term target will continue to be Short (2 targets). It is recommended to monitor price action for Short since CAD is weaker than AUD at the moment.
Pair Correlation > AUDCAD has positive correlation with NZDUSD, AUDUSD and NZDCAD and negative correlation with EURAUD and GBPAUD.
This was my Idea and I hope you find it useful. If you find the analysis of help please leave a LIKE and FOLLOW for receiving all updates during the week. In the comment section you can share your view and ask questions.
Thank You
AP17FX
