AUDCAD rebounds as crude slumps but trend still bearish
Thanks to the Bank of Canada turning hawkish, the Canadian dollar has been on a tear in recent weeks. But today it took a hammering as crude oil prices plunged. The Loonie fell against all the major pairs, even versus the Australian dollar, which had taken a nose dive itself in the past few days due to the Reserve Bank of Australia refusing to tilt towards the hawkish side like many other major central banks. But once the impact of the oil price sell-off wares off, the AUD/CAD could resume its bearish trend as market participants focus on the divergence on monetary policy between Australia and Canada.
For now though, the AUD/CAD is holding its own above a bullish trend line and is in the process of forming a potential inside bar candle on its daily chart. However, this inside bar formation could prove to be a bull trap if the potential break above its high fails to hold tomorrow. There is one key area where the potential bounce could come to an end: 09922-30. This was the last support area prior to Tuesday’s breakdown. Once support, it could turn into resistance, leading to another move lower.
Overall, the fundamentals still point to further weakness for the AUD/CAD pair, and as such we view today’s bounce as a mere retracement in what we believe is a bear trend. However if the AUD/CAD were to break and hold above the pivotal 0.9922-30 area then we would have to put our fundamental views on hold. Indeed, a potential break above the 0.9980 level, the most recent high, would completely invalidate our bearish view, at least from a technical perspective anyway.
Source: eSignal and FOREX.com.
The information on this web site is not targeted at the general public of any particular country. It is not intended for distribution to residents in any country where such distribution or use would contravene any local law or regulatory requirement. The information and opinions in this report are for general information use only and are not intended as an offer or solicitation with respect to the purchase or sale of any currency or CFD contract. All opinions and information contained in this report are subject to change without notice. This report has been prepared without regard to the specific investment objectives, financial situation and needs of any particular recipient. Any references to historical price movements or levels is informational based on our analysis and we do not represent or warranty that any such movements or levels are likely to reoccur in the future. While the information contained herein was obtained from sources believed to be reliable, author does not guarantee its accuracy or completeness, nor does author assume any liability for any direct, indirect or consequential loss that may result from the reliance by any person upon any such information or opinions.
Futures, Options on Futures, Foreign Exchange and other leveraged products involves significant risk of loss and is not suitable for all investors. Losses can exceed your deposits. Increasing leverage increases risk. Spot Gold and Silver contracts are not subject to regulation under the U.S. Commodity Exchange Act. Contracts for Difference (CFDs) are not available for US residents. Before deciding to trade forex, commodity futures, or digital assets, you should carefully consider your financial objectives, level of experience and risk appetite. Any opinions, news, research, analyses, prices or other information contained herein is intended as general information about the subject matter covered and is provided with the understanding that we do not provide any investment, legal, or tax advice. You should consult with appropriate counsel or other advisors on all investment, legal, or tax matters. References to FOREX.com or GAIN Capital refer to StoneX Group Inc. and its subsidiaries. Please read Characteristics and Risks of Standardized Options.
Please note that foreign exchange and other leveraged trading involves significant risk of loss. It is not suitable for all investors and you should make sure you understand the risks involved, seeking independent advice if necessary.
Contracts for Difference (CFDs) are not available to US residents.
FOREX.com is a trading name of GAIN Capital - FOREX.com Canada Limited, 30 Independence Blvd, Suite 300 (3rd floor), Warren, NJ 07059, USA is a member of the Canadian Investment Regulatory Organization and Member of the Canadian Investor Protection Fund. GAIN Capital – FOREX.com Canada Limited is a wholly-owned subsidiary of Stonex Group Inc.
Complaints are taken very seriously at FOREX.com. You can view our complaints procedure here.
© FOREX.COM 2025