AUDCAD decline scenario involves support break amid trade risks

The AUDCAD currency pair is declining on Friday, representing the expectations of the Reserve Bank of Australia’s (RBA) monetary stance and trade risks associated with the Canadian dollar. 

A Reuters poll shows that the RBA is to hold the rate steady at the level of 4.10% at its meeting on April 1. The consensus forecast expects two cuts in May and September 2025, which can weaken the Australian dollar in the long term. Goldman Sachs has also revised the rate cut outlook, pushing the forecast from April to May. 

Meanwhile, the Canadian currency is under pressure due to escalation of trade disputes with the US. President Donald Trump has signed an executive order to impose 25% tariffs on automobile imports and threatened drastic measures against the EU and Canada if they introduce retaliatory duties. Prime Minister of Canada, Mark Carney, states that the Canadian authorities are ready to retaliate if the US imposes new automobile duties. It creates uncertainty for the Canadian economy, since about 75% of the country’s exports go to the US. 

Additional pressure on the Canadian dollar can be put by Canada’s GDP data, which is due for release later during the North American session. The GDP is forecasted to grow 0.2% month on month, which matches the previous reading. 

From the technical point of view, AUDCAD is in the upward correction on the H4 timeframe. The price is at the channel support, which puts pressure on the pair. At the same time, a corrective component may lead to a momentum move against the current tendency. The move can be intensified when the channel support is broken, since the Bears Power indicator (13, open) shows strengthening bearish dynamics, reflecting the growth of negative zone volumes.

Short-term prospects for AUDCAD suggest selling with the target of 0.8860. Part of the profit should be taken near the level of 0.8940. A Stop loss could be set at 0.9100.

Since the bearish scenario is short-term, the trading volume should not exceed 2% of your total balance to reduce risks.