AUDCAD: A Price Consolidation in the Bearish Flag Pattern

AUDCAD has recently arrived at a new low at the 0.8930 level. From that support level , the price retraced, forming a very nice looking bearish flag channel. As we forecasted in our previous AUDCAD analysis, we expected the price to retest the previous high at 0.9100 level, then form a consolidation pattern within the bearish flag channel.

The price retested the 0.9100 level, but was rejected twice and created a neckline at the 0.9050 level. The RSI shows a bearish divergence. Therefore, we will observe the price action and see if the price will break below the neckline level of 0.9050 for a reversal to occur from the bearish flag channel.

Check out our previous AUDCAD analysis below :)