AUDCAD enters correction after failed test of 0.9 level

The AUDCAD currency pair has once again attempted to climb above 0.9 this week. The resistance level has held firm against the Australian dollar buyers for the fourth consecutive month. This time, traders quickly retreated, acknowledging that prices are not yet ready to break out of the current 0.89–0.9 trading range. The recently initiated pullback could extend toward 0.89, where AUDCAD may once again become an attractive buying opportunity.

Weakening upward momentum is clearly visible on the 4-hour chart of the instrument. Here, the quotes have repeatedly dropped below the 5- and 10-period moving averages, while the Stochastic Oscillator has shown a sell signal. The price pullback could accelerate if the 20-period moving average, currently located around 0.8965, is broken downward. This scenario may also be influenced by events expected next week.

The Bank of Canada (BOC) is set to hold another monetary policy meeting next Wednesday. According to a Reuters survey, traders anticipate the key interest rate will remain unchanged at 2.75%. Even yesterday’s data showing a 1.1% drop in retail sales for May did not alter expectations significantly. Preliminary June statistics (+1.6%) helped offset the negative impact of May’s decline.

Meanwhile, the Reserve Bank of Australia (RBA) is now projected to accelerate monetary policy easing. The latest Bloomberg survey reflects market expectations of three rate cuts by early 2026. Previously, they had forecast only two such steps, but clear signs of labor market softening have prompted this shift in predictions.

As a result, the interest rate differential between Canada and Australia could narrow, putting additional pressure on AUDCAD.

Consider the following trading strategy:

Sell AUDCAD below the 0.9 level. Take profit: 0.89. Stop loss: 0.902.