A Failed Breakdown at Yearly Support Could Trigger Further Upside

Central Bank

Economic

Summary:

The current price area has previously acted as a launching point for upward movements, suggesting that buyers could once again attempt to extend the recovery.

BUY AUDCAD

EXP

TRADING

0.97901

Entry Price

0.99060

0.96900

0.97907 +0.00018 +0.02%

0.0

Pips

Flat

0.96900

Exit Price

0.97901

Entry Price

0.99060

In Australia, the Reserve Bank of Australia (RBA) raised its cash rate by 25 basis points (bps) to 4.85%, as widely expected, bringing interest rates to their highest level since 2008. This marked the central bank's fifth increase this year, as policymakers respond to renewed inflationary pressures driven by the global oil crisis triggered by the war in the Middle East.

Despite the rate increase, the decision was accompanied by a divided vote and more moderate forward guidance. Six board members supported the increase, while three preferred to leave interest rates unchanged. The RBA also removed its explicit reference to further increases if necessary, suggesting that policymakers may be approaching a more cautious stage in the current tightening cycle.

RBA Governor Michele Bullock adopted a cautious tone, stating that "it is probably better to pause and assess the incoming data." Bullock also said she was "uncertain about the next move in interest rates," emphasizing that monetary policy "takes time to have an effect." Her comments indicate that the central bank may prefer to evaluate the impact of previous rate increases before making further adjustments.

On Tuesday, Bank of Canada (BoC) Governor Tiff Macklem appeared before the House of Commons Standing Committee on Finance, where he stated that "further rate increases may be needed" because the war in the Middle East is keeping energy prices "higher for longer." His remarks highlight the central bank's concerns over the persistence of inflationary pressures and the possibility that higher energy costs could delay the return to price stability.

The updated projections also point to a longer path back toward the BoC's 2% inflation target. The central bank expects Consumer Price Index (CPI) inflation to rise to around 3.5% by the end of the year and average 3% in 2027, one percentage point above its July forecast, before gradually moderating toward 2% by mid-2028. This outlook suggests that inflation could remain elevated for longer than previously anticipated, potentially requiring a more restrictive monetary policy stance. A Failed Breakdown at Yearly Support Could Trigger Further Upside_1

A Failed Breakdown at Yearly Support Could Trigger Further Upside_1

Technical Analysis

AUDCAD briefly broke below the support level at 0.9748, which had provided a solid floor for price action since May. However, the breakdown was quickly reversed, followed by a strong bullish reaction that brought the pair back above this level. The current price area has previously acted as a launching point for upward movements, suggesting that buyers could once again attempt to extend the recovery. If bullish momentum continues, the pair could move toward 0.9906, where local resistance coincides with an area of volume interest. This zone is also close to the 100- and 200-period moving averages, currently located at 0.9906 and 0.9869, respectively, creating a potential cluster of technical resistance that could become relevant as price advances.

Looking at the oscillators, the RSI declined to 28, clearly entering oversold territory and potentially attracting renewed buying interest around the current support area. Meanwhile, the MACD is showing a bearish histogram that has lost virtually all its depth, making an upward crossover increasingly likely. However, its signal lines remain in bearish territory, suggesting that the current upward movement should still be considered a corrective retracement rather than a confirmed change in the prevailing trend. A sustained recovery in price and further improvement in the MACD would be necessary to strengthen the bullish outlook.

Trading Recommendations

Trading direction: Buy

Entry price: 0.9788

Target price: 0.9906

Stop loss: 0.9690

Validity: Nov 17, 2026 15:00:00

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A Failed Breakdown at Yearly Support Could Trigger Further Upside

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