The AUD/CAD pair tried to rally during the session on Friday, but as you can see got turned around and formed a massive shooting star. This shooting star is based around the 0.97 handle, so of course it looks as if we may get a little bit of a pullback in this general vicinity. I believe that there is some type of consolidative area between here and the 0.9550 handle, so it's likely that is where we will eventually head back down towards. The Australian dollar looks like it's ready to pull back at this point in time as it is compared against the US dollar as well, as it is pressing up against the 0.95 resistance barrier.
That being said, it makes a lot of sense that the Australian dollar will react in a similar manner against both North American currencies, as both of those economies tend to be very interlocked. Because of this, it makes it an obvious correlation between the US dollar and Canadian dollar against the Aussie.
Gold versus oil
In one sense, you can think of this as gold versus oil. The Australian dollar of course is highly correlated to the gold markets in general, as is the Canadian dollar is highly correlated to the oil markets. As oil has been falling recently, it makes sense of this pair is been rising. That being the case the market seems to be reacting more to the price of oil than anything else as the gold markets have been relatively stale.
All that being said though, if we managed to break through the top of the shooting star, that of course is a very bullish sign and I believe that the Australian dollar will reach the 0.98 handle, and the 1.00 handle after that. In fact, I believe that there is a bit of an "air pocket" between those two levels, and therefore you may find ourselves at parity rather quick. Ironically, the Australian dollar will more than likely hit parity against the US dollar as well during roughly the same time.
