Flash: A break of the 0.9900 in AUD/CAD would signal potential for steeper declines - TDS

The Aussie/Cad has been in a firm downtrend since mid April, now trading at its lowest levels since October 2012 around 0.9966. However, some analysts believe the downside could be limited from here but point out a few levels to monitor should recent support not hold.

According to Shaun Osborn, Chief FX Strategist at TD Securities, “no bounce at all for AUD/CAD after last week’s bull reversal signal leaves the cross looking precariously poised right around the 0.9955 support level today.”

Osborn went on to comment, “we had expected good support on weakness to this point—the base of the range and acollection of lows since 2011—and the “morning star” bull reversal that we noted last week seemed to support that notion. We can still allow for a little more softness in the AUD near-term but a clear and sustained break of the 0.9900/15 (0.9917 was the July 2011 trough) would signal a more extensive, medium-term decline for the cross (perhaps towards the lows 0.90s).”