Invest in AUDCAD with 0.99500 target

The AUDCAD pair is currently moving within a flat channel between 0.98250 and 0.99500.

The Australian economy remains solid, though the effects of monetary tightening are becoming more evident as the pace of economic growth slows. The annual GDP rate is now estimated at around 2.6%. The outlook for 2026 has recently been revised downward to 2.0%, reflecting restrained expectations regarding future dynamics. Both unemployment and inflation have just risen slightly, with the latter remaining elevated, partly due to climbing energy prices. Under these circumstances, the Reserve Bank of Australia (RBA) is determined to keep its hawkish tone. In May, the regulator raised interest rates to 4.35%, marking the third consecutive hike. Such an aggressive policy underpins the national currency and Aussie-denominated assets. Elevated prices for iron ore and other raw materials, steady exports to China, and a positive trade balance driven by a vibrant commodity sector serve as additional pillars of support for the AUD. Thus, the current setup is favorable for the pair.

In Canada, the picture is more subdued. The country’s GDP is growing at a moderate pace. The jobless rate is slightly higher and inflation is slightly lower than in Australia. The key difference lies in monetary policy: the Bank of Canada (BoC) has held interest rates steady at 2.25% for four meetings in a row, revealing the regulator’s softer stance compared to the RBA. While the loonie benefits from rising crude prices, its upside is capped by the BoC's cautious approach and heavy reliance on outside factors.

All in all, the Australian currency holds a fundamental advantage over its Canadian counterpart, as the loonie remains tied to volatile oil prices and external risks.

The ultimate recommendation is to buy AUDCAD at the current price, targeting 0.99500 within one month. To mitigate risks of adverse market movements, place a Stop Loss order just below the support level, at 0.98250.