AUDCAD was contending with a downward bias until November when price broke out of its descending channel. Since then, monthly highs have been achieved with resistance at the mid-0.96 range.
The recent bearish divergence noted on the momentum indicator sees prices once again entering the channel. A touch at the 50% of the 0.9691/0.9247 downside Fibonacci leg saw a progression past the 61.8%.
We now look at a bounce at the golden ratio for further support and another test at monthly highs past the 78.6%. Should this be a false break, then prices are expected to fade, falling back into the channel and into Ichimoku cloud engulfment.
A shorter-term outlook eyes prices finding support at the top end of the descending channel. The bias is currently towards the upside as the Ichimoku cloud is now the next target.
Should prices breach the said level, then the recent peaks of the low 0.96 range could come into play.
However, resistance at this range could make room for the recent hidden bearish divergence that could send prices lower. If this comes into fruition, then another fall to the top border channel is likely.
November lows could then become a possibility if prices are firmly consumed into the channel.