AUD/CAD seems prime for a large correction on its 1-hour time frame, as the pair has found support around its recent lows around .9450.

The pair could pull up to any of the Fib levels marked, particularly the 61.8% level, which is in line with a former support zone. However, a shallow retracement is also possible until the 38.2% Fib, which is also close to an area of interest.

Stochastic is still pointing up, which means that there’s enough buying pressure to push for a retracement. Shorting at the 38.2% Fib with a stop above the 61.8% Fib could yield a good return on risk for a day trade.

By Kate Curtis from Trader’s Way