AUDCAD remains stuck in a narrow 0.88–0.90 range as opposing central bank tones and stagnant oil prices tug the pair in both directions. Currently hovering around 0.8920–0.8940, the cross lacks a firm catalyst to break decisively, though subtle bearish undertones are emerging.
The Reserve Bank of Australia's recent 6–3 vote to pause at 3.85% has markets leaning toward a likely rate cut in August, softening AUD sentiment. Meanwhile, the Bank of Canada is taking a more measured approach despite signs of economic weakness, keeping its policy rate steady and reducing the rate divergence with the RBA.
On the Canadian side, subdued oil prices—trading near $67/barrel—have capped loonie strength, while domestic PMI data has offered only modest support. Trade-related headwinds, particularly from U.S. tariff risk, also linger over CAD.
1. Technical snapshot
AUDCAD hovers near 0.8920–0.8940, close to the mid‑range of a recent 0.88–0.90 consolidation channel. Resistance sits near 0.8960–0.9000, while support zones lie at 0.8880–0.8900 and 0.8800.
2. Central bank divergence & rate outlook
The RBA held at 3.85% on July 7 with a 6‑3 split, signaling cautiousness before further easing. Markets expect another cut in August. Meanwhile, the BoC remains more cautious, delaying reductions despite signs of a weaker economy. This narrows the yield gap—even as actual pricing favors further Aussie rate drops.
3. Commodity & CAD pressure
Oil, a key CAD driver, remains range‑bound near $67/barrel, limiting loonie strength. Canada's PMI data showed modest resilience, but looming US tariff risk keeps CAD under mild pressure.
Summary:
AUDCAD trades slightly bearish in a 0.88–0.90 box as the RBA pivots and BoC holds steady. A clear break below 0.8900 may expose 0.8800, while a rally past 0.8960–0.9000 would shift momentum. Watch RBA minutes, BoC commentary, oil prices, and trade headlines for catalysts.
AUDCAD – H2 Timeframe
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On this AUDCAD 2-hour chart:
Price broke out of a descending trendline with a strong bullish impulse, signaling a potential shift in short-term momentum.
The move was initiated from a clear demand zone (highlighted box), where a sharp rejection candle formed, leading to the breakout.
After the bullish breakout, price entered a retracement phase and is now pulling back toward the same demand zone.
A trendline (rising black line) also intersects the zone, creating a confluence of support.
My Trading Plan:
I'll wait for price to dip into that boxed demand zone (around 0.8885–0.8905).
If I see bullish confirmation (e.g., bullish engulfing, pin bar, or strong rejection wick), I'll go long, targeting a retest of the recent swing high near 0.8975+.
If price breaks and closes below the zone and the ascending trendline, I'll stay out and reassess the structure.
This setup relies on the assumption that demand holds and structure remains intact. The price reaction in that confluence area is key to validating the bullish bias.
Direction: Bullish
Target- 0.89756
Invalidation- 0.88723
CONCLUSION
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