Rebound Scenario Remains in Focus from Key Technical Levels

Economic

Central Bank

Summary:

Despite the recent decline, the broader bullish structure remains intact, and the upward move could resume if support levels continue to hold.

BUY AUDCAD

EXP

TRADING

0.99044

Entry Price

1.00300

0.98600

0.99304 +0.00047 +0.05%

0.0

Pips

Flat

0.98600

Exit Price

0.99044

Entry Price

1.00300

The Reserve Bank of Australia currently maintains its cash rate at 4.35%, and markets widely expect policymakers to raise it to 4.60% at the September 29 meeting. Before then, attention will turn to Australia’s employment report, scheduled for release at 01:30 GMT on Thursday. Economists expect employment to increase by 20,000 jobs while the unemployment rate is projected to remain unchanged at 4.5%. A result in line with expectations would likely keep the RBA on track to deliver another rate increase later this month.

Markets also expect data from the Australian Bureau of Statistics (ABS) to show that the participation rate remained unchanged at 66.9%, matching the previous month’s reading.

The ABS separately reports changes in full-time and part-time employment through its monthly labor market statistics. In general, full-time jobs involve working 38 hours or more per week, often include additional benefits, and typically provide more stable income streams. Part-time employment, by contrast, can offer higher hourly pay rates but generally comes with less stability and fewer benefits. As a result, stronger full-time employment growth is often viewed more positively from an economic perspective. In July, Australia lost 32,200 part-time jobs while adding a modest 16,300 full-time positions.

In Canada, Bank of Canada Governor Tiff Macklem recently adopted a more hawkish tone, warning that consecutive interest rate increases could become necessary if elevated energy prices and ongoing trade uncertainties begin feeding into broader inflation pressures.

The Bank of Canada left its benchmark interest rate unchanged at 2.25% during its September policy meeting, a decision that was widely anticipated by financial markets. Nevertheless, policymakers emphasized that inflation risks have increased, while newly introduced tariffs have added uncertainty to the economic outlook. Market participants currently estimate nearly a 60% probability that the Bank of Canada will deliver a rate increase at its next policy announcement on October 28. Rebound Scenario Remains in Focus from Key Technical Levels_1

Rebound Scenario Remains in Focus from Key Technical Levels_1

Technical Analysis

AUDCAD experienced a strong pullback after briefly reaching the 1.0012 level, a significant psychological barrier that attracted selling pressure. Despite the recent decline, the broader bullish structure remains intact, and the upward move could resume if support levels continue to hold.

Price has already begun to show signs of a bullish reaction after reaching the 200-period moving average, currently located at 0.9911. Meanwhile, the 100-period moving average is positioned slightly higher at 0.9943. Adding further significance to this area, the recent rebound developed very close to the local support level at 0.9907. The combination of moving average support and a nearby horizontal support zone creates a technical area that could encourage buyers to return to the market.

If this support region continues to hold, AUDCAD could attempt another move toward the 1.0000 psychological level and potentially challenge the recent high near 1.0012 once again. A successful break above that barrier would strengthen the bullish outlook and open the door to further gains.

Looking at momentum indicators, the Relative Strength Index (RSI) recently declined to 31, approaching oversold territory. This suggests that downside momentum may be becoming stretched and that buyers could begin regaining control from current levels. Similar RSI readings have previously coincided with rebounds within the broader bullish trend, making the current zone particularly important.

Meanwhile, the MACD continues to display a bearish histogram that is still gaining depth, indicating that corrective pressure remains active. At the same time, the signal lines are approaching the neutral area, suggesting that momentum is nearing an important inflection point. If buyers intend to regain control, the reaction could emerge before the indicator fully crosses below neutral territory. Should bullish momentum return from current levels, the recent decline would likely be interpreted as a correction within the broader uptrend rather than a trend reversal. Conversely, a decisive break below the key support region could weaken the bullish structure and open the door to a deeper decline.

Trading Recommendations

Trading direction: Buy

Entry price: 0.9905

Target price: 1.0030

Stop loss: 0.9860

Validity: Oct 06, 2026 15:00:00

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Rebound Scenario Remains in Focus from Key Technical Levels

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