The AUDCAD pair is showing signs of life with a modest bounce, moving in line with the holiday-season script of consolidation and low volatility. After opening the session near its daily low, it managed to pare back some of its earlier losses.
Technically speaking, indicators send conflicting messages. Bollinger Bands are now squeezing tighter—a telltale sign that a pause is coming before the next directional move. The Stochastic Oscillator is hovering near overbought levels, confirming buyers might be running out of gas in the short run. With its %K line sneaking up on the %D one from above, a near-term reversal could be in the cards. Adding to the cautious tone, the Chaikin Oscillator's negative reading points to a slow capital bleed—a trend that, amid thin holiday trading, suggests the market is merely taking a break.
Fundamentally, the Canadian dollar faces pressure after October's GDP data surprised to the downside, marking the largest monthly drop in nearly three years. Although a tepid recovery is expected for November, the fourth quarter (Q4) is shaping up to be lackluster. That said, geopolitical friction and rising crude prices are lending the loonie some support, even as the shadow of a 2026 supply glut tempers the effect.
Ultimately, the divergence in monetary policies provides a sturdy tailwind for AUDCAD. While the Bank of Canada (BoC) treads carefully around rate cuts, traders are starting to place bets on a potential Reserve Bank of Australia (RBA) hike in the second half of 2026.
Pay attention to the following trading plan:
Buy AUDCAD. Enter the deal at current levels near 0.91590, with Take Profit 1 at 0.92050 and Take Profit 2 at 0.92330. Set Stop Loss at 0.91160.
This forecast holds true from December 26, 2025 till January 2, 2026.
This content is for informational purposes only and is not intended to be investing advice.
