FxWirePro: AUD/CAD extends 200-DMA breakout, bias higher, stay long

• AUD/CAD closed above 200-DMA on Wednesday's trade, scope for further upside.
   
• Bank of Canada hiked rates by 25bp to 1.25%, inline with market expectations.
   
• In a statement that followed, the Bank noted higher rates will be needed over time but there’s no rush to deliver another follow up anytime soon.
   
• Governor Poloz said that accommodative policy is still needed due to NAFTA risks and that hiking rates too quickly could stall the economy.
   
• Dovish comments weighed on the loonie, AUD/CAD spiked to hit highs of 0.9983 before paring gains to close at 0.9909 levels.
   
• Technical studies are bullish, RSI and Stochs are biased higher. We see +ve DMI dominance and ADX support for current uptrend.
   
• Price action has shown breakout above channel top at 0.9855, raising scope for further upside. We see weakness only on retrace into channel.

Support levels - 0.9906 (200-DMA), 0.9897 (5-DMA), 0.9855 (channel top), 0.9828 (20-DMA)

Resistance levels - 1.00, 1.0052 (61.8% Fib retracement of 1.0345 to 0.9579 fall), 1.0074 (Aug 8 high)

Call update: Our previous call (http://www.econotimes.com/FxWirePro-AUD-CAD-breaks-200-DMA-at-09906-good-to-go-long-on-close-above-1100926) is progressing well.

Recommendation: Stay long for targets.

FxWirePro Currency Strength Index: FxWirePro's Hourly AUD Spot Index was at 51.8098 (Neutral), while Hourly CAD Spot Index was at 6.86709 (Neutral) at 1000 GMT. For more details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex.

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