AUDCAD: Over last four sessions, Pair under 1.0000 for the First Time since March
The daily candle chart below shows the price history of the Australian Dollar (AUD) versus the Canadian Dollar (CAD). This pair is known as AUDCAD, and is currently trading near .9968 around time of publication today. Over the last four trading days the pair has been stuck under 1.0000 with support found near .9934 at the end of last week, as well today and yesterday near .9950.
Last time AUDCAD was reviewed in the Ideas You Can Trade series, earlier in January this year, a steep drop which was expected failed to materialize, and the pair recovered sharply from the downtrend it had been stuck in towards the end of 2013.
Now that the 50% Fibonacci Line has been tested again for the first time since March, if .9930 fails the bearish momentum should continue, whereas if 1.0000 can be regained the bearish momentum may be delayed.
Below are examples of how to trade a bearish continuation or a bullish reversal:
1. BULLISH BUY ENTRY ORDER: Create a “Buy Entry Stop” @ .9989 with a Limit to take profit @ 1.0019 and a stop-loss @.9961 Risk/Reward Summary: Limit risk = +30 pips profit / (-28) Stop-loss risk = Gain to Loss ratio = 1.07
2. BEARISH SELL ENTRY ORDER: Create a “Sell Entry Stop” @ .9925 with a Limit to take profit @ .9882 and a stop-loss @ .9959 Risk/Reward Summary: Limit risk = +43 pips profit / (-34) Stop-loss risk = Gain to Loss Ratio = 1.26
Medium term daily candle chart: