Following the soft Australian inflation report, AUD/CAD broke below a near-term rising support line from May. This opens the door for resumption of the dominant downtrend from mid-March to mid-May. With that in mind, this presents an attractive opportunity for a short position. The stop for this setup will be a daily close above the most recent high around 0.96618.
Meanwhile, prices may eventually reach the May low around 0.95533 which would be the target of this short setup. Calculating a risk-reward ratio of at least 2-to-1 reveals an entry point around 0.96256 which was used to short AUD/CAD. Along the way there may be a couple of points where prices could stall. This is the November and December 2017 lows at 0.96122 and 0.95786 respectively.
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