Be reactive, not PredictiveWe have a very interesting situation on AUDCAD. From a to down analysis, we see that in the monthly, the market has just made and equal high to the previous high. And when that is done, we need to expect a little retracement to complete a very important pattern (SHS). And also price is at a monthly resistance level, and that merit our attention. Coming down on the weekly, we also saw that the market close with a bearish candle forming a bearish engulfing g with the preceding bullish candle. This pattern is a pattern that i like so much, cause it 90% reliable and tells the actual situation between bulls and bears. Now on the daily, the situation becomes even more interesting, we have a very good pattern, The Head and Shoulder pattern. And we can see that the market is also about completing the retracement phase to the neckline. So everything is technically in confluence, from the monthly to the daily.
Fundamentally speaking, high institutions and banks opened thousands of shorts (3K) and (1K) Long. In the long term, AUD has being increasing in strength.. While in the short time, it has been decreasing as well. The CAD, they closed 2K longs and are opening 3K shorts, slightly making the Canadian dollar weak.. So weak plus Weak, we get Weak... So this week we might expect this pair to melt to the down side.
We are gong to monitor price action on the neckline on the Daily Time frame.. If there is a shift in trend on the lower time frame then, we are going to take the trade with a good risk to reward and a good probability to the downside. But still, we should be very careful, why because the market retraced and then formed a bullish engulfing pattern. SO the market can also continue to the upside. If that happens then i am going to bring an update to the situation
