AUDCAD correction may relieve technical tension before next leg up

After hitting a local high on Thursday, the AUDCAD pair traded lower on Friday morning. The market seems to be gathering strength before determining its next move. Further growth without any meaningful correction is unlikely.

The price remains above the 20-day exponential moving average (EMA20), which acts as a dynamic support level at 0.94917. This confirms that the upward scenario is still intact. However, quotes are now slowly retreating from the upper Bollinger Band (0.97070) and the recent high (0.96982), suggesting a pullback may be underway.

Momentum indicators signal favorable conditions for a short-lived downward movement. The Stochastic Oscillator (%K=71, %D=65) is still in neutral territory, but a bearish crossover of its lines near the overbought zone may shift the balance of power to sellers. In other words, the pair could correct or consolidate in order to take a breather and relieve some technical stress. Meanwhile, the Chaikin Oscillator, despite being in positive territory, is also trending down, retreating from recent peaks set in early February. Bears appear poised to win the tug-of-war.

The fundamental picture is quite the opposite, favoring the pair’s further growth. The Aussie is now thriving on the Reserve Bank of Australia’s hawkish rhetoric. RBA Governor Michele Bullock has recently stated that the regulator is determined to keep tightening monetary policy. 

On the flip side, the Canadian dollar is under pressure from lower oil prices. The International Energy Agency (IEA) forecasts a global supply glut of 3.73 million barrels per day in 2026.

Keep in mind that the current decline in AUDCAD and bearish signals from momentum indicators should be viewed as a technical correction within a broader uptrend.

The following trading strategy may come into play:

Buy AUDCAD, entering a trade near 0.96200. Place Take profit 1 at 0.96700, Take profit 2 at 0.97250, and Stop loss at 0.95400.

The forecast remains relevant between February 13 and February 20, 2026.