AUDCAD approaches upper boundary of flat channel

Since a strong rally in early September, the AUDCAD currency pair has traded within a flat channel between 0.907 and 0.92. Last week, the price attempted to break out of this region but failed. A successful rebound from the 0.907 level has since sparked a rally that remains intact. Traders can still enter buy positions at favorable prices, as targets at 0.92 and 0.924 have not yet been reached.

The technical setup signals the pair’s untapped upside potential. The Stochastic Indicator is only now approaching overbought territory, while the RSI remains below the 60 threshold. This gives bulls a solid chance to push AUDCAD toward the 0.92 resistance, where at least partial profit-taking is advisable. The 0.924 level is also within reach, but achieving it would require the price to break above the upper Bollinger Band.

Australia’s inflation report bolstered the national currency, with the headline figure of 3.8% and the trimmed mean of 3.3%. Given these results, experts surveyed by Reuters have largely ruled out the probability of a rate cut by the Reserve Bank of Australia (RBA) in the coming months. Some analysts even expect RBA officials to return to monetary tightening in response to persistent consumer prices.

Canada has been more successful in curbing inflation. The government’s main headache now is the slowing economy. Trade negotiations with the United States are on hold. However, Canada’s Prime Minister Mark Carney and American President Donald Trump are scheduled to meet next Friday. Meanwhile, the Q3 GDP report is due today, posing a near-term threat to the loonie before any potential support can materialize.

Consider the following trading strategy:

Buy AUDCAD at the current price, with Take profit 1 at 0.92, Take profit 2 at 0.924, and Stop loss at 0.911.