The AUD/CAD cross is always on my watch list. Both are considered risk or growth related currencies. Both are linked to a major economy – the CAD to America and the AUD to China. While US data is showing a recovery, there are market doubts about growth trends in China. Combined with the charts, there is a case to sell AUD/CAD.
Here’s the daily chart from CMC’s Tracker platform:
From February to May this year, AUD/CAD fell 8 big figures. The retracement to just above the 50% mark appears to be faltering, and I’m looking for resumption of the downtrend. The closing gap in the MACD is also pointing downwards.
More cautious traders may wait for the MACD to cross, and/or trading below Monday’s low point at 1.0278. I’ve seen enough and am looking at this trade:
SELL 250,000 AUD/CAD at market, stop loss above 1.0346, first target 1.0150, second 0.9960