Buying AUDCAD on resistance breakout targeting 0.9000

The AUDCAD pair has clearly established a technical resistance level at 0.8990. Strong barriers like this consistently attract investor attention and are typically broken through. On the higher 4-hour timeframe, a larger figure is taking shape, with resistance at 0.9027. This engenders a scenario in which a smaller bullish pattern is embedded within a more expansive one, thereby amplifying the likelihood of an upward breakout. 

Fundamentally, this signal is driven by either Australian dollar strength or Canadian dollar weakness, or both. The interest rate differential favors the AUD, with the Reserve Bank of Australia (RBA) holding at 3.6% compared to the Bank of Canada's 2.75%. The latter's Q2 GDP also fell short of market expectations, with a steep drop from 0.5% to -0.4%, a commonly cited indicator of looser monetary policy and a weaker loonie.

Last month, Australia's inflation surged beyond anticipated levels, approaching the upper end of the RBA target range (2–3%). The consumer price index climbed to 2.8%, marking the highest annual rate since July 2024 and exceeding June's data, when it was 1.9%. This surpassed economists' forecasts of 2.3%. On top of that, the Australian regulator's preferred trimmed mean measure, which excludes volatile items, increased from 2.1% to 2.7%. These stronger-than-anticipated inflation figures make it highly likely that the RBA will maintain its current interest rate at the late September meeting, thereby supporting the aussie.

The overall recommendation is to buy AUDCAD. Profits are taken at 0.9000. Stop loss is set at 0.8970.

The volume of your open position should be calculated so that the potential loss (protected by a Stop Loss order) does not exceed 1% of your deposit. If your account balance does not allow opening a position of this size, it is better to avoid entering the market on this signal and wait for other trade options that meet low-risk criteria.