Re-entry into the Channel and Sharp Bearish Reaction Present Sell Opportunities

Forex

Economic

Summary:

With the BoC maintaining a hawkish posture, we could see a downward move toward the lower boundary of the channel near 0.9814, where the next key local support is located.

SELL AUDCAD

EXP

TRADING

0.99179

Entry Price

0.98140

0.99990

0.99057 -0.00143 -0.14%

0.0

Pips

Flat

0.98140

Exit Price

0.99179

Entry Price

0.99990

The Australian economy expanded by 0.4% quarter-over-quarter during the second quarter of the year, slightly beating most analysts' forecasts and reinforcing expectations of a potential interest rate hike by the Reserve Bank of Australia (RBA) in the near term.

According to the latest National Accounts released by the Australian Bureau of Statistics (ABS), the economy recorded 2.1% year-over-year growth through June on a seasonally adjusted basis. Following the data release, markets significantly raised the odds of a rate increase at the RBA’s September meeting. Futures-implied pricing now reflects nearly a 70% probability of a rate hike, up from roughly 50% prior to the report.

Furthermore, investors view a rate hike by November as nearly fully priced in, while assigning close to a 20% likelihood to consecutive increases across both September and November. Current market expectations suggest the RBA cash rate could peak near 4.8% by mid-next year, roughly 50 basis points above its current level of 4.35%.

In China, manufacturing activity continued to show signs of recovery. The RatingDog Manufacturing PMI rose to 51.5 in August from 50.9 in July, remaining firmly in expansionary territory. Market attention now shifts toward the upcoming Gross Domestic Product (GDP) release, which will provide broader clarity on China's economic trajectory.

Meanwhile, the Bank of Canada (BoC) left its benchmark interest rate unchanged at 2.25%, a decision fully anticipated by markets. However, the central bank adopted a more cautious tone, noting that inflation risks have tilted upward and assessing the economic recovery has become increasingly complex.

Governor Tiff Macklem stated that multiple rate hikes could become necessary if inflation remains a persistent challenge. Nevertheless, he emphasized that upcoming decisions will depend entirely on how the inflation outlook and surrounding risks evolve. Echoing this view, Senior Deputy Governor Carolyn Rogers stressed that monetary policy cannot react to a single data point or isolated risk, but must rely on a comprehensive assessment of the broader economy.

The central bank's statement also highlighted a challenging mix of macroeconomic factors, including softening labor demand, persistent excess supply, and growing uncertainty surrounding the sustainability of the recovery. Additionally, new U.S. tariffs and potential future trade measures continue to weigh on the growth outlook, while ongoing conflict in the Middle East keeps energy prices elevated, amplifying upside risks to inflation. Re-entry into the Channel and Sharp Bearish Reaction Present Sell Opportunities_1

Re-entry into the Channel and Sharp Bearish Reaction Present Sell Opportunities_1

Technical Analysis

AUDCAD has been trading within an ascending channel structure that recently appeared to break above its upper boundary; however, price spent little time above resistance before quickly returning inside the channel. Price action recently retested the upper boundary line, confirming the zone's technical relevance. With the BoC maintaining a hawkish posture, we could see a downward move toward the lower boundary of the channel near 0.9814, where the next key local support is located. Meanwhile, the 100-period and 200-period moving averages sit at 0.9885 and 0.9865, respectively; a sustained close below these averages could accelerate downside momentum.

Looking at the oscillators, the RSI currently sits at 44, holding in bearish territory with ample room to extend its move lower after rejecting down from a peak of 76. Meanwhile, the MACD displays a bearish histogram that appears to be regaining depth, accompanied by signal lines that have recently crossed into negative territory, indicating that the path of least resistance remains to the downside.

Trading Recommendations

Trading direction: Sell

Entry price: 0.9920

Target price: 0.9814

Stop loss: 0.9999

Validity: Sep 15, 2026 15:00:00

Risk Warnings and Disclaimers

You understand and acknowledge that there is a high degree of risk involved in trading. Following any strategies or investment methods may lead to potential losses. The content on the site is provided by our contributors and analysts for information purposes only. You are solely responsible for determining whether any trading assets, securities, strategy, or any other product is suitable for investing based on your own investment objectives and financial situation.

Risk Disclosure

The risk of loss in trading financial instruments such as stocks, FX, commodities, futures, bonds, ETFs and crypto can be substantial. You may sustain a total loss of the funds that you deposit with your broker. Therefore, you should carefully consider whether such trading is suitable for you in light of your circumstances and financial resources.

No decision to invest should be made without thoroughly conducting due diligence by yourself or consulting with your financial advisors. Our web content might not suit you since we don't know your financial conditions and investment needs. Our financial information might have latency or contain inaccuracy, so you should be fully responsible for any of your trading and investment decisions. The company will not be responsible for your capital loss.

Without getting permission from the website, you are not allowed to copy the website's graphics, texts, or trademarks. Intellectual property rights in the content or data incorporated into this website belong to its providers and exchange merchants.

Recent Searches

Top Searches

Markets

Analysis

User

24/7

Economic Calendar

Education

Data

Re-entry into the Channel and Sharp Bearish Reaction Present Sell Opportunities

Technical Analysis

Risk Disclosure