November 25, 2021 15:08:03
With oil prices stabilising, CAD has enjoyed a better week. The Bank of Canada’s relatively hawkish outlook also bodes well for more gains further out. Employment is back to pre-pandemic levels and punchy inflation could see the BoC hike rates as soon as the second quarter next year.
AUD/CAD into long-term support zone
We looked at this pair a few weeks ago and highlighted the long-term resistance just above 0.91. Trend momentum had turned bearish, and we expected a move lower in line with the dominant trend.
The pair tested July lows at 0.9144/45 soon after. But prices consolidated some more above this support, though crucially below the 50-day and 100-day SMAs. Yesterday saw a decisive move down through 0.9144. Key support below at 0.9105/15 has also been broken today.
The October 2018 low sits at 0.9104.A strong close below this support zone should see more AUD weakness. Long-term levels don’t appear until 0.8816.
GBP/CAD resumes downtrend
The steep bearish momentum in this pair slowed in mid-October. Prices got above springtime support at 1.7012. But the sellers forced the issue again getting below May support at 1.6859.
We made a new low at 1.6718 though the daily RSI didn’t follow. A bounce through trend resistance from the September highs only took us back to springtime support/resistance.
The pair is now trading back at the May lows around 1.6859. Sellers appear to be pushing through this level again, so aim for 1.6718/01.
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