AUDCAD Forecast: The AUDCAD finds itself in a nuanced battleground around the 0.9085 handle, trading within the confines of a recent consolidation rectangle. The broader structure, however, remains tilted to the downside following a significant displacement move that broke below a key previous swing low. This break was not clean; the subsequent price action suggests a liquidity grab below the 0.9070 level, a move that likely swept retail stop-losses before a sharp mitigation rally back into the heart of the range. This is classic institutional behavior: engineering a move to consume liquidity before reversing to fill the resulting price imbalance (or Fair Value Gap) created by the aggressive sell-off. The current equilibrium is bounded by clear areas of interest. To the upside, a supply zone and the recent high near 0.9115 present a formidable ceiling. A genuine breakout above this level would require strong buying pressure and would likely target the sell-side liquidity resting above the next significant swing high. Conversely, the downside remains the path of least resistance from a structural perspective. The low around 0.9065, which was recently violated, now acts as a key liquidity pool. A sustained break and close below this level could trigger another wave of selling, targeting the next untested demand zone lower on the daily chart. For short-term sentiment, the reaction to these boundaries is key. A rejection from the 0.9115 supply, especially on signs of slowing momentum, would signal that sellers are still in control, using the rally to establish short positions. Alternatively, if price can base above 0.9090 and stage a displacement through 0.9115, it would indicate a potential shift in order flow, negating the immediate bearish bias. Traders should watch for mitigation blocks around the range extremes; a false breakout above 0.9115 that quickly reverses would be a strong signal that liquidity has been grabbed and a move in the opposite direction is imminent. Discipline involves waiting for these confirmations rather than anticipating the break, with a clear focus on how price interacts with these defined liquidity zones.
