AUDCAD aims for new highs on strong fundamentals

The AUDCAD currency pair keeps trading higher, approaching significant resistance at 0.92420. The Australian dollar has recently been backed by surprisingly strong macroeconomic reports, causing markets to have second thoughts about their previous monetary expectations. On the one hand, resilient retail spending and steady economic growth signal robust domestic demand. On the other, persistently elevated inflation readings—which remain above the Reserve Bank of Australia's (RBA) target—are preventing the regulator from considering further policy easing. Moreover, recent comments from the RBA Governor have struck a hawkish tone, particularly if current price pressures endure.

Meanwhile, the Canadian dollar is now finding temporary support in the rising cost of oil driven by geopolitical risks. Unrest in the Caspian region and escalating tensions between the United States and Venezuela are causing supply disruptions, underpinning commodity markets. However, the fundamental outlook for CAD remains challenging. Recent PMI reports have shown sluggish business activity. The situation is further exacerbated by the Bank of Canada’s (BoC) decision to pause its rate-cutting cycle amid the country’s uncertain trade relations with America.

Higher oil prices could cause a short-term correction in AUDCAD. However, this effect is likely to be temporary, as the RBA maintains a comparatively more hawkish stance than the BoC. The end of the current spike in the crude market is only a matter of time.

The technical setup aligns perfectly with this fundamental view. Bullish momentum is building, as confirmed by key indicators. The Stochastic Oscillator (%K=65, %D=57) continues its ascent, with no signs of entering overbought territory. The Chaikin Oscillator is also positive, suggesting buyer dominance. Collectively, these factors are pushing AUDCAD closer to a major technical resistance level, where traders may begin taking profits.

Try out the following trading strategy:

Buy AUDCAD during a correction toward 0.91950, with Take profit at 0.92885 and Stop loss at 0.91630.

This forecast is valid from December 5 to December 12, 2025.