After peaking in mid-September, the AUDCAD pair underwent a correction and retreated to find support along the 4-hour chart's uptrend. An initial rebound from this line stalled at 0.917, with the price subsequently pulling back to 0.91. If the underlying trend holds, there is potential for a new upward move and a further test of 0.917.
The Stochastic Oscillator is approaching the oversold zone again, with its lines nearing a crossover. This replicates the conditions that preceded last week's successful signal, suggesting the potential for opening long positions. The uptrend line might be tested, yet the 200-day moving average could act as a buffer. Short-term buying remains viable unless the price breaks below 0.9065.
Today's release of Canadian GDP data for July is poised to be a key driver for AUDCAD. Forecasts from Reuters analysts project only minimal growth of 0.1%, underscoring a weak economic performance. This outlook is consistent with recent remarks from Bank of Canada Governor Tiff Macklem, who stated that adapting to US tariff policies will take time and require supportive fiscal and monetary measures, leaving the door open for further interest rate cuts.
On the other hand, the Reserve Bank of Australia (RBA) is expected to keep its current borrowing costs at the September 30 meeting. The chances of a rate reduction in November have also diminished, dropping from 70% to 50% after August inflation figures revealed a surge from 2.8% to 3%. These developments reinforce the regulator's cautious stance and are set to strengthen the Aussie, particularly against the softening Lonnie.
The following trading plan may come into play:
Buy AUDCAD at or higher than 0.91. Take profit: 0.917. Stop loss: 0.9065.
This content is for informational purposes only and is not intended to be investing advice.
