Another step down?

By akohad Jun8,2023


Monotonous headlines are tiring, but what if the pairs are falling? Today’s #AUDCAD pair is drawing the stairs going down on the monthly chart. Perhaps this is an illusion that the brain sees, but sometimes associations help to understand what is happening on the chart. If the range of the pair’s fluctuations has indeed shifted down, as shown by the third box on the left, then we can expect at least a drop to the previous high of 0.85984, and if the sellers’ plans are more serious, much lower — as was the case with the pair in 2019 before COVID. As you can see, the monthly candles have long tails at the top, which means that every month the buyers are trying to get the pair back into growth, and so far they have not succeeded. June also starts with a rise, but the price has already fallen from the monthly maximum (for one week so far) and is also threatening to go lower, although I am getting ahead of myself and the strength of the buyers is not yet known.

Looking at the daily chart of this pair, there is no particular doubt that the movement will go lower. The only question is the path and speed of the decline. With the green arrows, I have drawn a faster path and a possible decline even to the low of 16 October last year at 0.85984, although this is still questionable as there are no special zones where liquidity can accumulate and pending orders from buyers can wait until this very low. The only thing that could cause a correction is a strong break below the 100-day moving average, which is often accompanied by a reversal and another scenario, indicated by the red arrows. Similar to what happened on the chart in April — early May, the pair will move in a range, gradually gaining counter-liquidity for a subsequent decline. Let’s see which of the possible scenarios will be realised.

Yesterday we saw a strong downward momentum and today a slow growth. On the hourly chart this looks like a bullish trend and I think it will continue for a while. Yesterday’s strong impulse was clearly not part of the sellers’ plans, as it could greatly worsen the average selling price, so the upward movement will continue in the near future in order to attract more buyers, whose orders will be used by the sellers as counter-liquidity.


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By akohad

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