Greenback Weakens vs. Australian Dollar

By Mohammed Isah of fxtechstrategy.com

AUD-USD: The pair was seen strengthening today, shrugging off its Tuesday negative close and leaving further upside risk beyond its year-to-date high at 0.9327. (See the first chart below.)

A convincing invalidation of the 0.9327 level will resume the pair's medium-term uptrend and put further upside pressure on 0.9592, the July 27, 2008 high, ahead of 0.9790, the July 20, 2008 high. The daily Relative Strength Index and stochastics are bullish and trending higher, suggesting further strength.

Support starts at the 0.9275 level, the Oct. 26 high, ahead of 0.9142, the Nov. 4 high. A break there would see the pair target 0.8994, where its medium-term rising trend line is located. A cap is expected there. On the whole, the pair remains biased to the upside in the near term and could resume its medium-term rising trend.

USD-CAD: The pair could be on its way to a third day of weakness this week as a follow-through lower on the back of its Tuesday losses now has the pair targeting the 1.0434 level, its Oct. 16 high. (See the second chart below.)

If that level is broken, we could witness more downside pressure toward the pair's year-to-date low at 1.0204. A clean break there would resume the pair's medium-term downtrend toward the 1.0100 and then 1.0000 levels. Its daily RSI is bearish and pointing lower, suggesting further weakness.

On the other hand, resistance stands at the pair's Nov. 4 high at 1.0592 and then at 1.0867. A turn above there would put the pair on the path to further upside towards the 1.0991 level, its Sept. 27 high, followed by 1.1101, its Sept. 2 high.

On the whole, the pair still retains its downside weakness triggered off the 1.0867 level and is now targeting the 1.0434 level and below.