AUD/CAD potential long opportunity as key resistance becomes support

AUD/CAD chart and technical analysis

The price of AUD/CAD made a considerable recovery and broke through a key resistance zone of 0.88125. The price also closed above the 0.88400 resistance level. This could mark the beginning of a bullish trend as the bullish market structure has been broken and the price is making new higher highs.

Currently, the price is looking for a correction and will probably retrace back to the 0.88125 support level which previously was a strong resistance. The price could continue its rally from this price as it is around a major support level and 0.5 Fibonacci level.

Moreover, the price has also formed a bullish head and shoulder pattern which is a bullish reversal pattern and indicates a bullish trend ahead. I am the 0.88125 level for long entries and my target for this trade is the 0.89800 daily resistance zone.

AUD/CAD fundamental analysis

Fundamentally, the price of AUD/CAD is likely to remain stable as there are fewer high-impact news that could have a substantial impact on the price of AUD/CAD.

However, the FOMC and the jobless data on the USD would have some impact on the price of AUD/CAD. If the data is positive for the US dollar the price of AUD/CAD will drop and if the data turns out negative for the US dollar the price of AUD/CAD will climb up.

Australian dollar to Canadian dollar trade idea takeaways

•  AUD/CAD broke and closed above a key resistance level and previous high recently.
• The price of AUD/CAD will possibly reach the 0.89800 resistance level in the coming days.
• Multiple take-profit levels have been added to secure profit along the way.
• The risk-to-reward ratio on this trade is 1:4.6.
• The entry and stoploss prices have been placed at secure levels with the least probability of getting hit.
• Good luck!