AUD/CAD Analysis: Gap Pushes Price Beyond the Broadening Triangle
Key Takeaways
- •Reserve Bank of Australia Deputy Governor Andrew Hauser warned that another rate hike may be needed if inflation risks intensify.
- •The RBA kept its policy rate unchanged at 4.35% on 11 August for a second straight meeting.
- •AUD/CAD opened with a gap above the upper edge of a broadening triangle pattern on 24 August after trading in a sideways range since April.
- •Rising oil prices have supported the Canadian dollar as geopolitical tensions and supply concerns lifted crude this week.
- •Technical levels to watch include resistance at 0.9925 and support zones around 0.9850, 0.9832, 0.9815 and 0.9785.
On 19 August, Reserve Bank of Australia Deputy Governor Andrew Hauser took a more hawkish stance, 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 remarks came one week after the Reserve Bank of Australia 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 the 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 because of the country’s significant commodity exports.
That combination leaves AUD/CAD sensitive to both central-bank messaging and commodity moves, which helps explain why the pair is being watched closely as it tests the edge of a technical formation that has been developing for months.
Technical Analysis of AUD/CAD
On the four-hour AUD/CAD chart, a medium-term sideways range has been developing since April. Within that range, price has formed a broadening triangle, a pattern marked by diverging trendlines and 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, the next major obstacle could be the red resistance level at 0.9925.
If the breakout fails and price reverses lower, several levels inside the current market profile would come 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, is 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, offering limited confirmation of the strength of the current move.
Key Takeaways
The elevated RSI reading and neutral moving averages have not yet produced a coordinated signal, leaving the sustainability of the gap and the attempted breakout uncertain.
The fundamental backdrop is also mixed. The RBA’s increasingly hawkish rhetoric supports the Australian dollar, while higher oil prices could strengthen the Canadian dollar. The balance between those two forces may prove decisive for the next move in AUD/CAD.
