The AUDCAD currency pair finds itself in an intriguing position, heading towards a second consecutive week of positive gains. Canada’s recent inflation reading of 3.1% in November, which remained flat compared to the prior month, played a role in the Canadian Dollar’s depreciation against the Australian Dollar. Meanwhile, the Reserve Bank of Australia’s (RBA) decision to maintain the interest rate target at 4.35% underscored their cautious yet optimistic stance.
The RBA’s meeting minutes echoed a balanced strategy, emphasizing a watchful eye on inflation management while also hinting at potential rate hikes in the future. This delicate approach signalled their commitment to maintaining stability while being responsive to economic shifts. The AUD’s enduring strength, propelled by robust employment data and escalating incomes, showcases a resilient economic landscape.
Technical
The AUDCAD currency pair has showcased a compelling uptrend, navigating above the 100-day moving average, illustrating a bullish trajectory. The recent upward surge initiated from a sturdy support level at 0.87547, propelling the pair towards a significant resistance at the 0.90561 level, established back in July.
However, as this ascent encountered resistance, a downturn followed, prompting a retracement. The retracement found substantial support at the 61.80% Fibonacci Retracement Golden Ratio, marking a crucial turning point. The pair reversed its course from this pivotal juncture, suggesting a resilient stance despite the temporary setback.
The 0.90561 resistance level currently stands as a pivotal level for the pair, should the prevailing bullish momentum persist. This level signifies a critical point that could validate further upside movement, potentially extending the pair’s climb. Conversely, should a reversal occur, the Golden Ratio will likely serve as a potential barrier against downside momentum.
Summary
The AUDCAD is poised for a second positive week, propelled by Canada’s flat inflation and the RBA’s cautious optimism. The technical analysis underscores a resilient uptrend, with a critical resistance at 0.90561. If upside momentum persists, this level could serve as a point of interest.
Sources: Reserve Bank of Australia, Statistics Canada, Reuters, TradingView
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