Selling AUDCAD is underway amid bearish pressure

The AUDCAD pair is now trading sideways, confined between support at 0.87808 and resistance at 0.90486. After dropping sharply in late July, prices rebounded this week but stalled near the key psychological level of 0.90000. Currently, quotes are sitting at 0.89609.

On the daily (D1) timeframe, the EMA (20) and EMA (50) are close to the price, reflecting a lack of strong directional momentum. Although the EMA (20) is slightly above the EMA(50), suggesting a mild bullish bias, the narrow gap between them signals weakening buyer interest and a potential reversal. Aside from that, the price is testing the 0.90000 resistance, a level that has capped gains for three consecutive months. Such a proximity raises the chances of a downward correction as sellers regain control.

The Stochastic Oscillator remains in neutral territory, with %K at 54 and %D at 36, showing no overbought or oversold conditions. This reflects balanced market sentiment without extreme buying or selling pressure.

In the meantime, the MACD is also exhibiting neutral dynamics: while the MACD line holds above the signal one, the narrow gap between them points to a potential bearish reversal.

The Reserve Bank of Australia (RBA) meeting on August 12 is a key event to watch. According to a Reuters survey, markets are pricing in a 25-basis-point rate cut, which would lower borrowing costs to 3.6%. Recent inflation and labor market data support the case for easing monetary policy. A rate cut could weigh on the Australian dollar, potentially weakening AUDCAD. However, if the RBA holds rates steady against expectations, it may trigger a sharp short-term rally in the pair.

Here's a recommendation to take into account:

Sell AUDCAD at current levels (around 0.89609). Stop loss is placed at 0.90000. Take Profit is set at 0.88650, which is where the quotes fell last month before the regulator's meeting.

This forecast is valid from August 8 to August 15, 2025.