In this piece, we have two commodity currencies, i.e., instruments which are highly correlated with the price of commodities, in this case mostly gold and oil. Our hero is AUDCAD, and for the past two weeks this pair has been struggling with the super strong long-term resistance, which has been a legitimate support since the beginning of 2017.
For the time being, sellers are winning, as the price is still below, but the scale of the bounce does not really lend itself to opening new shorts. What is missing here is momentum. We do not have a bearish slide, even despite the fact that on the H4 chart we have a nice triple top formation. The triple top is up and running, as AUDCAD already broke the neckline of this formation (red). Despite all this, the price started this week on the front foot and is targeting the horizontal resistance again.
With the current lack of supply, the best idea is to wait. In my opinion, sell positions will be justified only when the price beats the lows from last week. The probability of this remains quite high and that is the scenario for this week. The sell signal will be cancelled when the price breaks the highs from the previous week, but the chances of that happening seem rather limited.
