AUDCAD upside may come into play in medium term

AUDCAD looks primed for a mildly bullish week (October 5–12, 2026), with a good chance of breaking above and holding onto the 0.9980–1.0000 zone. What's powering this move? A deep policy split between two commodity-linked central banks, all while the Middle East crisis continues to simmer in the background.

The Reserve Bank of Australia (RBA) has gone full hawk. In late September, it hiked its key rate by 25 basis points to 4.60%, citing sticky inflation and a strong jobs market. Governor Michele Bullock has made it clear: more tightening could be on the table. 

The Bank of Canada (BoC), by contrast, has been stuck in neutral, keeping borrowing costs at 2.25% for months. Sure, inflation spiked to 3.0% in August, and this pushed UBS and Oxford Economics to factor in an October hike. But even so, the Great White North is still miles behind Australia in the yield race. Such a gap will keep the Aussie propped up on fundamental grounds, feeding carry-trade flows into the currency.

Now, let's talk about oil versus the broader commodity rally. Typically, higher oil prices are a tailwind for the Canadian dollar. Right now, Brent crude is trading above $101 per barrel due to the military conflict in Iran. But here's the twist: a global inflation shock is lifting the entire commodity complex—metals, food, for instance—and this is a boon for Australian exports. Add to that a hawkish RBA, and the Aussie is gaining extra ground, blunting the CAD's usual oil-driven edge.

What's more, October has historically been a golden month for AUDCAD buyers. Over the past 20 years, the pair has seen a +0.78% increase during this period, with a better-than-65% chance of ending it in the black.

So, where does this leave us? Long positions are still the play this week. The next big catalyst? New Purchasing Managers' Index (PMI) data on business activity from both countries. 

The ultimate recommendation is to buy AUDCAD. Place Take Profit at 1.0000. Set Stop Loss at 0.9800.

Calculate your open position so that a potential loss (protected by a Stop Loss order) is limited to 1% of your deposit. If your account balance does not allow you to enter a position of this size, it is better to skip the trade and wait for other market signals that meet low-risk criteria.