The AUDCAD forex pair has had a see-saw start to the week, first declining and then seeing a sharp rally in Monday morning trading. The end result is that the pair is currently near where it closed Friday--1.02272.
The daily chart (see image) shows the forex pair has been trading in a rising trend channel, and is currently trading near the mid-point after reaching the high of the channel on March 26. The location of the current price isn't the most appealing for forex swing trading.
Watch for a pullback to the lower portion of the trend channel (near 1.0100), followed by a pause on the 30 minute or hourly chart, and then a break higher out of the consolidation. This sets a nice forex swing trade with the target near the top of the channel and a stop loss below the recent lows.
This channel is getting a little over-extended though, and won't last forever. If we see strong selling pressure into 1.0050, that will break the channel and indicate that the trend is shifting. At that point, rallies become selling opportunities. The pair has a tendency to trade in channels like this, so if we break to the downside, look for a downward channel to potentially develop.
The AUDCAD forex pair is moving 94.2 pips per day (10-week average), so there is enough volatility for day trading as well. But forex swing traders may want to sit on the sidelines for now until the price reaches more key areas.
Cory Mitchell, CMT