AUDCAD is poised to approach channel’s upper boundary after testing support

AUDCAD is now rebounding after retesting the lower limit of the parallel channel at 0.97500, gradually approaching the 0.98900 resistance level. However, the fundamental landscape for both currencies looks mixed, depriving the pair of clear directional momentum.

Since late June, prices have been trading within the 0.97500–0.98900 range. Over the past couple of weeks, AUDCAD has tested the floor of this channel twice—on July 20 and 29—each time nearly touching 0.97502, followed by a sharp V-shaped rebound. This recurring pattern suggests that buyers are determined to defend the bottom, preventing any consolidation below this threshold.

Current price action confirms this view. Quotes are now flying in the upper part of Bollinger Bands—between the middle line (0.98268) and the top (0.98886)—a typical behavior after a rebound from the lower limit at 0.97649. That said, the trading range has slightly widened compared to its narrowest point on July 21, so it is too early to speak of another strong momentum. The market is more likely to return to its usual than prepare for a breakout.

The Stochastic Oscillator adds further clarity. Both of its lines have just exited overbought territory—which they had entered on July 2—and are currently swimming in the neutral zone. However, today, the fast line managed to cross the slow one from bottom to top. This is an obvious bullish signal, though not the strongest. Trading volume spikes on July 29–30, which accompanied the sell‑off and subsequent rebound, point to the involvement of major players rather than random market noise.

On the fundamental front, the pair is caught between two significant factors. In Australia, soft inflation readings have basically ruled out the probability of an August hike by the national regulator—not a favorable scenario for the Aussie. Meanwhile, the Bank of Canada (BoC) looks poised to keep borrowing costs unchanged, despite internal disagreements among policymakers. Strained trade relations with the closest neighbor, the United States, add another layer of uncertainty to the loonie’s outlook.

Consider the following trading strategy:

Sell AUDCAD during a rebound toward 0.98650. Place Take profit at 0.98000. Set Stop loss at 0.99100.

The forecast remains relevant between July 31 and August 7, 2026.