The key catalyst for the Australian dollar remains the July inflation data released on 26 August. The figure came in at 3.5% year-on-year, versus expectations of 3.2%, while the Trimmed Mean increased by 0.5% month-on-month, compared with a forecast of 0.3%. The following day, 27 August, NAB revised its forecast for the RBA’s next policy decision. The bank now expects a 25-basis-point rate hike at the September meeting, taking the rate to 4.6%, with the risk of another increase in November.
For the Canadian dollar, the key factor was the Bank of Canada’s decision. On 2 September, the central bank left its policy rate unchanged at 2.25% for the seventh consecutive meeting, highlighting economic uncertainty stemming from US tariffs and Canada’s retaliatory trade measures.
Technical Analysis of AUD/CAD
The four-hour AUD/CAD chart shows a pronounced uptrend that has lifted the pair towards the current resistance level at 0.9985. A pattern resembling a converging triangle formed near the top of this advance, with price fluctuations gradually narrowing within the formation. However, volume dynamics during the second half of the pattern’s formation have been atypical, casting doubt on its reliability.
Nevertheless, the price has broken out of the pattern while also moving above the upper boundary of the current market profile at 0.9950, and is attempting to establish itself above this level. If the advance continues, the red resistance level around 0.9985 is the next key obstacle on the upside.
In the event of a false breakout, the price could return to the profile. If the scenario turns bearish, the pair would need to break not only the upper boundary of the profile but also the Point of Control (POC) at 0.9935 and the lower boundary at 0.9910. Below the market density, a green support level is located around 0.9895.
The RSI + MAs indicator is showing readings of 59, 52 and 54. The RSI has moved above the neutral zone, while both the fast and slow moving averages remain below its upper boundary.
Key Takeaways The atypical volume dynamics during the formation of the triangle leave the reliability of the breakout uncertain, while the price’s attempt to establish itself above the market profile has yet to receive confirmation from the RSI + MAs indicator. The pair’s further direction could depend largely on whether the expected tightening of RBA policy materialises against the backdrop of the Bank of Canada’s wait-and-see stance.
Trade over 50 forex markets 24 hours a day with FXOpen. Take advantage of low commissions, deep liquidity, and spreads from 0.0 pips (additional fees may apply). Open your FXOpen account now or learn more about trading forex with FXOpen.
This article represents the opinion of the Companies operating under the FXOpen brand only. It is not to be construed as an offer, solicitation, or recommendation with respect to products and services provided by the Companies operating under the FXOpen brand, nor is it to be considered financial advice.
FXOpenhttps://www.fxopen.com/
FXOpen is a global Forex and CFD Broker, founded in 2005 by a group of traders. With over 16 years of experience, the company has gained an excellent reputation a major brokerage that continues to expand rapidly. The broker offers a choice of platforms, including the popular MT4 and MT5 platforms, with a wide range of trading instruments with spreads from 0.0 pips: 600+ FX, index, share, commodity and cryptocurrency CFDs. FXOpen also provides its own PAMM technology, allowing clients to benefit from the strategies of experienced traders with a proven track record of successful trading and guarantees automatic distribution of profit and loss between the strategy provider and the strategy followers. CFDs are complex instruments and come with a high risk of losing your money. PAMM is only available in certain jurisdictions. Cryptocurrency CFDs are not available to Retail clients at FXOpen UK.
AUD/CAD is approaching an interesting technical decision point, with price pushing back towards the upper boundary of a multi-month triangle near 0.9920–0.9940.
The pair has spent much of the summer consolidating after the strong rally seen earlier this year. Since June, AUD/CAD has effectively compressed between falling resistance around 0.9940 and rising support from roughly 0.9750. That tightening range suggests volatility is being stored, with the latest move putting the upper boundary back under pressure.
From a technical perspective, a daily close above roughly 0.9940 would be the cleaner bullish confirmation. That would break the sequence of lower highs within the consolidation and potentially reopen the path towards the previous highs around 0.9950, followed by the psychological 1.0000 area.
Failure to break, however, would keep the triangle intact and leave AUD/CAD vulnerable to another rotation back towards the middle and lower end of the range.
Fundamentals offer some support to the Australian DollarThe macro backdrop also provides an interesting relative story.
The Reserve Bank of Australia currently holds its cash rate at 4.35%, after raising rates three times earlier this year. Inflation remains above target and the RBA continues to describe price pressures as too high, meaning Australian monetary policy is likely to remain comparatively restrictive.
There is a caveat. Australia’s labour market has started to cool: unemployment increased to 4.5% in July, while employment unexpectedly declined. That reduces the urgency for additional RBA tightening and represents the main risk to the bullish AUD side of the story.
The Canadian dollar, meanwhile, faces a more idiosyncratic headwind. US–Canada trade tensions have escalated sharply, with negotiations breaking down and Canada preparing retaliatory tariffs. The Canadian dollar weakened following the latest escalation, while preliminary data also suggests Canadian factory sales slipped in July.
Canadian trade uncertainty → growth risks increase → CAD pressure.
What to watchFor now, the macro backdrop supports the bullish technical setup, but price still needs to confirm it.
Bullish trigger: daily close above 0.9940.
Key resistance: 0.9950, then 1.0000.
Bearish invalidation: rejection from resistance followed by a move back through the recent 0.9830–0.9850 area.
The triangle is therefore the key battleground. A confirmed breakout would suggest the Australian dollar is beginning to translate its relative macro advantage into price.
On 19 August, Reserve Bank of Australia Deputy Governor Andrew Hauser adopted a more hawkish tone, warning that another rate increase could become necessary if the inflation risks highlighted by the central bank — including the conflict in the Middle East, a surge in demand from the AI sector and weak productivity — begin to materialise.
His comments came one week after the RBA decided on 11 August to leave its policy rate unchanged at 4.35% for a second consecutive meeting.
For the Canadian dollar, oil prices remain a more important driver. Crude has continued to rise this week amid heightened geopolitical tensions and concerns over potential supply disruptions. Higher oil prices can traditionally support the Canadian dollar given the country’s significant commodity exports.
Technical Analysis of AUD/CAD
On the four-hour AUD/CAD chart, a medium-term sideways range has been developing since April. Within this range, the price has formed a broadening triangle, characterised by trendlines that diverge rather than converge and reflecting progressively wider price swings.
On Monday, 24 August, trading opened with a gap above the upper boundary of the formation. If the bullish impulse continues to develop, the next significant obstacle could be the red resistance level at 0.9925.
A failed breakout and subsequent reversal lower would bring several key levels within the current market profile into focus. These include the upper profile boundary at 0.9850, the Point of Control (POC) at 0.9832 and the lower profile boundary at 0.9815.
Below the profile’s main area of concentration, near the base of the triangle, lies the green support zone around 0.9785.
The RSI + MAs indicator currently shows readings of 71, 48 and 50. The oscillator is approaching overbought territory, while both moving averages remain around the middle of the neutral zone, providing little confirmation of the strength of the current move.
Key Takeaways The elevated RSI reading and neutral moving averages are yet to produce a coordinated signal, leaving the sustainability of the gap and the attempted breakout uncertain.
The fundamental backdrop is also sending mixed signals. The RBA’s increasingly hawkish rhetoric provides support for the Australian dollar, while higher oil prices could strengthen the Canadian dollar. The balance between these two forces may prove decisive for the next move in AUD/CAD.
Trade over 50 forex markets 24 hours a day with FXOpen. Take advantage of low commissions, deep liquidity, and spreads from 0.0 pips (additional fees may apply). Open your FXOpen account now or learn more about trading forex with FXOpen.
This article represents the opinion of the Companies operating under the FXOpen brand only. It is not to be construed as an offer, solicitation, or recommendation with respect to products and services provided by the Companies operating under the FXOpen brand, nor is it to be considered financial advice.
FXOpenhttps://www.fxopen.com/
FXOpen is a global Forex and CFD Broker, founded in 2005 by a group of traders. With over 16 years of experience, the company has gained an excellent reputation a major brokerage that continues to expand rapidly. The broker offers a choice of platforms, including the popular MT4 and MT5 platforms, with a wide range of trading instruments with spreads from 0.0 pips: 600+ FX, index, share, commodity and cryptocurrency CFDs. FXOpen also provides its own PAMM technology, allowing clients to benefit from the strategies of experienced traders with a proven track record of successful trading and guarantees automatic distribution of profit and loss between the strategy provider and the strategy followers. CFDs are complex instruments and come with a high risk of losing your money. PAMM is only available in certain jurisdictions. Cryptocurrency CFDs are not available to Retail clients at FXOpen UK.
The Aussie enters this week with genuine hawkish backing. RBA Assistant Governor Christopher Kent reaffirmed that tighter policy is working as intended, with markets now pricing roughly a 70% chance of one final hike to 4.60% by early next year, even as inflation eased below forecasts last quarter. That combination of commodity strength, gold, iron ore and LNG all running above forecast, and a still-hawkish central bank has kept AUD broadly supported near multi-week highs, with all eyes now on Thursday’s July employment report.
The loonie tells an even stronger story. Canada’s economy expanded at a blistering 3.4% annualised pace in Q2, well above the Bank of Canada’s own 2.5% forecast, while July employment surged by 75,100 jobs against expectations of just 15,000, pulling unemployment down to a two-year low of 6.4%. That combination of surprising growth and labour market strength has fuelled speculation the BoC could hike if elevated energy prices persist, giving CAD real independent momentum of its own.
The result: two resource-linked currencies both riding genuinely hawkish narratives, leaving AUD/CAD’s next move to hinge on which central bank blinks first.
Technical Analysis of AUD/CAD
As the chart shows, AUD/CAD has been compressing into a symmetrical triangle since early August, with a descending trendline from the 0.9926 high converging with an ascending trendline off the 0.9748 low, both meeting right around current price near 0.9847, exactly where the 100-period EMA also sits.
Bullish Scenario
Should buyers break above the descending trendline and the 0.382 retracement near 0.9858, the path would open towards the 0 level at 0.9926, a confirmed breakout that would suggest genuine momentum returning to the pair.
Bearish Scenario
Conversely, a break below the ascending trendline and the 0.5 retracement near 0.9837 would expose the 0.618 level near 0.9816, with a deeper slide risking a retest of the 0.786 retracement around 0.9786, or even the 0.9748 low that anchored this entire structure.With price coiled right at the apex of this triangle, sitting exactly on the 100-period EMA, AUD/CAD looks primed for a decisive break, will the Aussie’s hawkish backing prove enough, or does the loonie’s stronger data ultimately win out?
Trade over 50 forex markets 24 hours a day with FXOpen. Take advantage of low commissions, deep liquidity, and spreads from 0.0 pips (additional fees may apply). Open your FXOpen account now or learn more about trading forex with FXOpen.
This article represents the opinion of the Companies operating under the FXOpen brand only. It is not to be construed as an offer, solicitation, or recommendation with respect to products and services provided by the Companies operating under the FXOpen brand, nor is it to be considered financial advice.
FXOpenhttps://www.fxopen.com/
FXOpen is a global Forex and CFD Broker, founded in 2005 by a group of traders. With over 16 years of experience, the company has gained an excellent reputation a major brokerage that continues to expand rapidly. The broker offers a choice of platforms, including the popular MT4 and MT5 platforms, with a wide range of trading instruments with spreads from 0.0 pips: 600+ FX, index, share, commodity and cryptocurrency CFDs. FXOpen also provides its own PAMM technology, allowing clients to benefit from the strategies of experienced traders with a proven track record of successful trading and guarantees automatic distribution of profit and loss between the strategy provider and the strategy followers. CFDs are complex instruments and come with a high risk of losing your money. PAMM is only available in certain jurisdictions. Cryptocurrency CFDs are not available to Retail clients at FXOpen UK.
TL;DR: The RBA’s Tuesday hold is a formality — what matters for AUD/CAD is whether its tightening bias survives, and the setup is asymmetric: preserving it offers limited support, while confirming the cycle has ended could trigger a deeper correction.
Why the Rate Decision Itself Won’t Move Markets The RBA is widely expected to leave the cash rate unchanged at 4.35% on Tuesday, making the decision itself largely a formality. After softer-than-expected Q2 inflation, Australia’s Big Four banks now agree rates are likely to stay on hold through the rest of 2026, while broadly expecting the next move to be a cut sometime in 2027.
That pushes market focus away from the rate decision and toward a narrower question: how much of the RBA’s tightening bias survives? For the Australian Dollar, the setup is asymmetric — keeping another hike theoretically alive may offer limited support, while clearer confirmation that the tightening cycle has ended could have a larger negative impact.
The First Signal: Policy Statement Language The first signal will come from the policy statement. Every RBA statement this year has retained some version of the line that “the Board remains attentive to upside risks to inflation.” Keeping that language would amount to a hawkish hold, but it would largely preserve existing policy optionality rather than make another hike materially more likely.
More consequential would be a shift toward language suggesting policy is sufficiently restrictive, or removal of explicit emphasis on upside inflation risks. Such a change would give markets their clearest indication yet that 4.35% is the peak rate.
The Bigger Signal: The Quarterly Statement on Monetary Policy The more important signal should come from the quarterly Statement on Monetary Policy (SoMP). May forecasts had trimmed-mean inflation returning to the top of the 2–3% target band during 2027, but the Q2 reading subsequently undershot the RBA’s own projection at 3.6%.
If August forecasts maintain that disinflation path or bring the return to target forward, despite starting from softer inflation, the Board would effectively be validating the improvement and strengthening the case that further tightening is unnecessary. Conversely, if the RBA pushes the return to target further out, it would suggest policymakers aren’t yet prepared to fully trust the latest inflation moderation. The technical cash-rate assumption embedded in the forecasts will also be worth comparing with the previous SoMP, particularly to see how much easing is already incorporated into the projection path.
Why the Upside for AUD Is Limited This leaves limited upside asymmetry for AUD. Even if the RBA preserves hawkish language, the current 4.35% rate is already clearly restrictive, making an extended hold more plausible than another increase. Markets therefore have little reason to rebuild meaningful hike expectations simply because the Board refuses to close the door.
By contrast, a softer inflation track or explicit peak-rate language would provide genuinely new information and allow attention to shift more decisively toward eventual easing.
Why This Matters for AUD/CAD That asymmetry makes AUD/CAD particularly interesting. CAD received support from last week’s stronger-than-expected Canadian employment report and could benefit further if the oil rebound extends. At the same time, AUD/CAD’s uptrend from 0.8902 has clearly lost momentum, as reflected in both daily and weekly MACD, while the pair is close to major resistance at 0.9991 from the 2021 peak.
ActionForex’s Technical View on AUD/CAD Technically, a break of 0.9721 support would indicate the five-wave rally from 0.8902 is already correcting, bringing a deeper fall to the 38.2% retracement of 0.8902 to 0.9957, at 0.9555. That area is close to the fourth-wave low around 0.9510 and the 55-week EMA near 0.9536.
However, a decisive break of 0.9991 would invalidate the correction case and extend the broader uptrend instead.
For now, the RBA retaining its tightening bias may be enough to keep AUD/CAD supported in range; losing it could provide the catalyst for a deeper correction.
Key Takeaways Tuesday’s RBA hold at 4.35% is a formality — the real signal is whether the tightening bias survives in the policy statement and SoMP forecasts. The key phrase to watch is “attentive to upside risks to inflation”; its removal would be the clearest signal yet that 4.35% is the peak rate. The quarterly SoMP matters more than the statement — whether the RBA maintains or delays its 2027 return-to-target path will show how much it trusts the Q2 inflation undershoot. The setup is asymmetric for AUD: preserving the tightening bias offers limited upside since another hike already looks unlikely, while losing it opens clearer downside. AUD/CAD is capped near 0.9991 resistance; a break of 0.9721 support opens a deeper correction toward 0.9555, while a break above 0.9991 would invalidate that case.
ActionForex
ActionForex.com was set up back in 2004 with the aim to provide insightful analysis to forex traders, serving the trading community for two decades. We started providing only a daily and a mid-day report, now known as Action Insights. Gradually, we added a lot more in-house contents to the site. Technical Outlook section was expanded to cover more pairs. In addition to that, Top Movers, Heat Map, Pivot Point Charts and Pivot Meters, Action Bias and Volatility Charts, are tools used by traders from all over the world.
As we all know, the Iran war is severely restricting the flow of Crude Oil through the Strait of Hormuz.
Saudi Arabia started to send more tankers out via the Red Sea, but now, we have a completely different set of problems in the Bab al-Mandab Strait, which is driving crude even higher.
In today’s Market Outlook, let’s take a look at Forex trading on EURNZD, NZDUSD, AUDUSD, AUDNZD, AUDCAD, Silver, XAGUSD, Gold, XAUUSD, WTI, and Brent Crude Oil.
So, the question for traders is, “when can we go short on WTI and Brent CFDs and watch price action fall to normal levels?”
There is no easy answer to this question, but the current US administration is under enormous pressure to end the war, but that may mean nothing in the short term.
This has caused more geopolitical uncertainty, and investors tested the $4,000 level of support on gold, with price heading up past $4,100 this week.
Silver followed gold, as it has been doing for months.
On the technical side, price action has broken through the upper trend line that we have been following for months.
On the weekly charts, we see falling wedges, which are almost always bullish patterns.
But keep in mind, these are weekly charts, so this may take a long time to play out.
This morning we saw Australian Employment Figures way higher than analysts’ expectations, and look what happened.
If we follow the rules of the News Catalyst Fade, we want to trade with the trend or within the range.
We note that in almost every case, the news drove price action WITH the trade buy; we can still look for reversals on other time frames.
We will keep an eye on AUDUSD, for example, where price is at a key level of resistance.
Also on AUDNZD, we see price at a key level with an overbought stochastic oscillator.
And, on AUDCAD, we see a strong ranging market with price at an upper trend line and an overbought stochastic oscillator.
Please feel free to check all other AUD pairs.
We see that NZD has been the strongest currency this month, but we also see that this may be changing.
For example, on NZDUSD, we see a pullback through the lower trend line, but we also see a falling wedge and an oversold stochastic oscillator.
Inflation in New Zealand is not under control, so we will keep an eye on all NZD pairs.
On EURNZD, we see the pullback as well, but with price action forming a rising wedge, and we will keep an eye on this as well.
And tomorrow’s ECB Interest Rate decision, so keep an eye on these and all EUR pairs.
That’s all for now.
CFDs and FX are leveraged products, and your capital may be at risk.
The Australian dollar has clawed back most of its end-of-June losses, when it touched three-month lows against the greenback amid escalating Middle East tensions. Since then, sentiment has improved: the RBA’s Assistant Governor Sarah Hunter signalled the board stands ready to tighten further if the recent oil shock feeds into inflation expectations. Still, resilient business surveys and a modest improvement in consumer confidence point to an economy holding up better than feared.
The Bank of Canada told a similarly nuanced story this week. Policymakers held the overnight rate steady at 2.25% and struck a cautiously optimistic tone on the domestic economy, upgrading medium-term growth expectations. At the same time, officials were careful to flag that instability in the Middle East continues to weigh heavily on the broader outlook, keeping the door open to both risks and opportunities depending on how the conflict evolves.
The result: two central banks watching the same geopolitical flashpoint, each balancing early signs of domestic resilience against a risk backdrop neither can fully control.
AUD/CAD Technical Analysis
As the 4-hour chart shows, AUD/CAD has been trading within a broader range between the 0.9750 support and 0.9950 resistance since April, with price action compressing into a tighter symmetrical triangle since June. This narrowing structure suggests a breakout could soon define the pair’s direction over the medium term.
Bullish Scenario Price continues finding support along the ascending trendline, having bounced off it multiple times and testing it once again. A renewed sign of strength here—breaking both the 200-period EMA and the descending trendline—would open the path back towards the 0.9950 resistance, the acid test for whether this level finally gives way or rejects price once more.
Bearish Scenario Should the ascending trendline finally break, price would quickly face the critical 0.9750 support, a level traders have been watching closely for months. A bounce here keeps the pair locked within its consolidation range, but a decisive break after so many failed attempts would likely signal a medium-term trend shift, opening the door toward the next area of interest between 0.9500 and 0.9550.
Will AUD/CAD finally commit to a direction after months of indecision?
Trade over 50 forex markets 24 hours a day with FXOpen. Take advantage of low commissions, deep liquidity, and spreads from 0.0 pips (additional fees may apply). Open your FXOpen account now or learn more about trading forex with FXOpen.
This article represents the opinion of the Companies operating under the FXOpen brand only. It is not to be construed as an offer, solicitation, or recommendation with respect to products and services provided by the Companies operating under the FXOpen brand, nor is it to be considered financial advice.
FXOpenhttps://www.fxopen.com/
FXOpen is a global Forex and CFD Broker, founded in 2005 by a group of traders. With over 16 years of experience, the company has gained an excellent reputation a major brokerage that continues to expand rapidly. The broker offers a choice of platforms, including the popular MT4 and MT5 platforms, with a wide range of trading instruments with spreads from 0.0 pips: 600+ FX, index, share, commodity and cryptocurrency CFDs. FXOpen also provides its own PAMM technology, allowing clients to benefit from the strategies of experienced traders with a proven track record of successful trading and guarantees automatic distribution of profit and loss between the strategy provider and the strategy followers. CFDs are complex instruments and come with a high risk of losing your money. PAMM is only available in certain jurisdictions. Cryptocurrency CFDs are not available to Retail clients at FXOpen UK.
