AUDCAD eyes another move from range floor to ceiling

The AUDCAD pair is right where we expected it to be, sticking to its script within the 0.907–0.924 area. Over the past week, the price has pulled back from 0.92 and is now knocking at the door of the range's lower boundary. This sets the stage for the next bounce with long positioning. Even after more than three months of this sideways grind, there is no clear sign of an impending breakout, either up or down. Therefore, playing the range is still the best strategy.

Delving deeper into the chart, the Stochastic Indicator has sunk to its most oversold level since early August, stacking the odds in favor of another leg higher. Meanwhile, the RSI has dipped back toward its midpoint, which should clear the path for the uptrend to resume. If bears try to push their luck, they will run into a wall of support—including the 100- and 200-day moving averages, plus the lower Bollinger Band—all standing guard. For buyers, the main prize remains the range top at 0.924, though it's wise to start taking profits once 0.92 comes into view.

The Canadian dollar's recent rally hit pause yesterday after comments from Prime Minister Mark Carney, who poured cold water on the idea of a near-term trade deal with the United States. The issue is now likely to be kicked down the road until the broader USMCA agreement gets renegotiated. Analysts polled by Reuters don't foresee any major breakthrough before the end of the first quarter (Q1) of 2026.

On the flip side, the Aussie is finding support from stubborn price pressures back at home. December's survey showed household inflation expectations rising from 4.5% to 4.7%, reinforcing the view that the Reserve Bank of Australia (RBA) could be the first out of the gate among major regulators to hike rates. The market has already made its bets: the odds for a February tightening are nearing 30%, while the probability for a May increase is over 50% now.

Consider the following strategy for your trading:

Buy AUDCAD at the current price. Place Take Profit at 0.92. Set Stop Loss at 0.907.