The AUDCAD pair is trading near three-month lows, a level that also happens to be a key support zone. This makes the current price a tempting entry point—especially if the fundamental winds continue to blow in the Aussie's favor.
Down under, the Reserve Bank of Australia (RBA) has already raised interest rates to 4.35%, making it clear that inflation hasn't been tamed yet. But the economic engine is sputtering: GDP growth slowed to just 0.3% in the first quarter (Q1), while unemployment crept up to 4.5%. This leaves the regulator with little room to tighten further. For now, however, Australia's borrowing costs remain substantially higher than those of its counterpart, thus putting the Aussie in the spotlight.
North of the border, the Bank of Canada (BoC) has kept interest rates frozen at 2.25% for five straight meetings, a sign that policymakers are treading carefully. The country's inflation has climbed to 3.2%, but much of this increase is tied to energy costs, so the regulator isn't rushing to act. Meanwhile, falling oil prices are adding to the loonie's woes, given the sector's heavy weight in Canada's export basket.
Turning to the charts, the pair is now testing a major support floor at 0.97500. A bounce from here could fuel a move toward 0.99500—a threshold worth keeping an eye on.
The ultimate recommendation is to buy AUDCAD at the current price, targeting 0.99500 within one month. To shield your position from a downside move, place a Stop Loss order just below the support level, i.e., at 0.97500.
This content is for informational purposes only and is not intended to be investing advice.
