0.9 level proved to be too high for AUDCAD buyers

This week saw the AUDCAD pair make its fourth attempt in three months to break above the strong 0.9 resistance level. As before, the rally stalled and prices retreated downward. Previous pullbacks found support near 0.892 and 0.888, and a similar move could unfold this time. The sideways trend persists, with no clear signals yet pointing to a breakout. 

The 0.9 resistance remains firm and is reinforced by the upper Bollinger Band, which has hovered near this level for over a month. Meanwhile, the lower Bollinger Band has held steady at 0.888, limiting any further decline. Once prices approach this threshold, closing short positions for profit-taking will make sense. For now, the most likely scenario is range-bound trading, with rebounds expected near the 0.888–0.9 boundaries.

The AUDCAD has shown upward momentum since early August, pushing technical indicators into overbought territory and leading to a correction, despite yesterday's positive Australian jobs report. Analysts polled by Reuters expect the Reserve Bank of Australia (RBA) to deliver two more rate cuts this year, following Tuesday's initial easing.

In contrast, the outlook for Canada's monetary policy remains less clear-cut. The July 30 meeting minutes revealed that some Bank of Canada officials believe current borrowing costs are now doing enough for the national economy. Further reductions may jeopardize efforts to control inflation, especially since the impact of US import tariffs is only just starting to show up in economic data.

The following trading strategy may come into play: 

Sell AUDCAD no higher than 0.9. Take profit 1: 0.892. Take profit 2: 0.888. Stop loss: 0.902.