The Australian Dollar (AUD) fell broadly against the Canadian Dollar (CAD) yesterday, dragging the price of AUDCAD to less than even 0.9800 thus leaving a classic bearish pin bar on the daily chart which might be a strong signal for the potential bearish trend in the short term. The technical bias already remains bearish due to a Lower High and Lower Low on the daily chart.
As of this writing, the pair is being traded around 0.9815. A hurdle can be seen near 0.9857, the swing high of the yesterday’s bearish pin bar ahead of 1.0065 that is the high of the bearish pin bar on weekly chart. A break and weekly closing above the 1.0065 resistance area could incite renewed buying interest, validating a move above the 1.0200 hurdle.
On the downside, the pair is expected to find a support at 0.9776, the 50% fib level ahead of 0.9700, the psychological number and then 0.9592, the swing low of the bullish pin bar which emerged earlier this month on the daily chart. The technical bias will remain bearish as long as the 1.0065 resistance area is intact.
Construction Work Done
The Australian Bureau of Statistics (ABS) yesterday released the quarterly construction work done report. The total construction work done remained -0.2% in the fourth quarter as compared to the revised 2.8% in the quarter before, up beating the average forecast of -1.2%. Generally speaking, higher construction work done figure is considered positive for the Australian economy and vice versa thus a better than expected actual outcome spurred bullish momentum in the price of AUDCAD and vice versa.
Considering the overall technical and fundamental outlook, selling the pair around the current levels appears to be a good strategy in short to medium term. The trade should however be stopped out at 0.9858.