Right now, AUDCAD is steadily creeping toward the psychologically significant 1.00000 threshold, and the Aussie is finding solid footing along the way. Expectations of further monetary tightening from the Reserve Bank of Australia (RBA) continue to be the currency's primary tailwind. With the regulator's interest rate sitting at 4.35% and inflation being stubbornly elevated, the door is still open for another hike before year‑end. A sharp deterioration in consumer sentiment in September only reinforced the picture of tight financial conditions: the index slid 5.2%, as households fretted over rising borrowing costs and fuel prices. It is a mixed bag for the Aussie. However, in the near term, it will sharpen the contrast between the RBA's stance and the Bank of Canada's (BoC) far more cautious approach.
By contrast, the fundamental backdrop for the loonie looks way more dovish. On September 2, the BoC held interest rates at 2.25% and left the door ajar for further hikes if inflation stays hot. Just two days later, though, labor market data landed with a thud: the country's economy shed 41,700 jobs, versus forecasts of roughly 15,000 new positions. Persistent trade tensions with the United States add to the loonie's woes. Notably, the Canadian dollar dipped this week, even as Brent crude pushed above $100 per barrel—a clear sign that weak macroeconomic data and tariff risks outweigh the typical boost that high oil prices provide.
From a technical perspective, AUDCAD has run right up against a major resistance zone near the 1.00000 parity level. The pair hasn't traded above this threshold in about nine years, so this is a big deal. Going long only makes sense if we see a clean break above 1.00000 and a solid hold above it. If this happens, it would confirm that bulls are in charge and set the stage for more upside ahead.
The final recommendation:
— Buy AUDCAD when it breaks out above 1.00000, targeting 1.02500 within one month.
— To keep risk in check if the market moves against us, place a Stop Loss order at 0.99000.
This content is for informational purposes only and is not intended to be investing advice.
