Top of the Descending Channel Offers Opportunities for a Downside Move

Manuel

Forex

Economic

Summary:

Given this confluence of technical levels, price is likely to pull back lower toward this area.

SELL AUDCAD

EXP

TRADING

0.99031

Entry Price

0.98330

0.99600

0.99278 +0.00185 +0.19%

0.0

Pips

Flat

0.98330

Exit Price

0.99031

Entry Price

0.99600

Minutes from the Reserve Bank of Australia’s (RBA) August meeting reinforced the hawkish stance recently adopted by Governor Michele Bullock, who noted that another rate hike remains a real possibility. Currently, futures markets are pricing in roughly a 60% probability that the cash rate will reach 4.60% before the end of the year.

According to the minutes, several board members felt there is a significant chance that upside inflation risks could ultimately materialize. The document also revealed that policymakers debated whether to raise the Official Cash Rate (OCR) by 25 basis points or keep it on hold at 4.35%.

However, despite the aggressive tone of the minutes and official warnings regarding persistent inflation pressures, market participants do not expect an immediate rate hike. According to Reuters, investors assign just a 13% probability to a rate increase toward 4.60% at the upcoming September 28–29 meeting. In contrast, expectations for a hike by February of next year are considerably higher, carrying a probability close to 67%.

On the trade front, tensions between the United States and Canada escalated over the weekend after Washington imposed 50% tariffs on select Canadian goods following the collapse of trade negotiations on Friday. In response, Canadian Prime Minister Mark Carney announced that Canada will implement retaliatory tariff measures beginning September 8.

For his part, U.S. Trade Representative Jamieson Greer stated that Canada declined to finalize the deal under the terms previously agreed upon. Carney, however, maintained that while progress was made in the talks, it fell short of meeting Canada’s objectives. He also criticized last-minute changes introduced by Washington, describing them as unfair, economically damaging, and potentially harmful to the credibility of any future trade agreement between the two nations. Top of the Descending Channel Offers Opportunities for a Downside Move_1

Top of the Descending Channel Offers Opportunities for a Downside Move_1

Technical Analysis

AUDCAD is trading within a downward sloping channel, having recently rejected the 0.9920 level where the upper boundary of the channel sits. Consequently, a downside rejection could originate from this zone toward the 0.9833 level—a local support area aligned with the 0.618 Fibonacci retracement. Positioned very close to this zone are the 100-period and 200-period moving averages at 0.9830 and 0.9836, respectively; given this confluence of technical levels, price is likely to pull back lower toward this area.

Turning to the oscillators, the RSI recently rose to 71, reaching overbought territory and edging slightly higher than the previous peak to signal a mild divergence. A downside correction appears viable under these signals if resistance at the upper channel boundary holds. Meanwhile, the MACD shows a bullish histogram that has lost almost all of its depth while the signal lines remain inside positive territory; however, a bearish crossover could materialize quickly as the signal lines lack significant height in the positive zone, leaving the path of least resistance tilted to the downside.

Trading Recommendations

Trading direction: Sell

Entry price: 0.9902

Target price: 0.9833

Stop loss: 0.9960

Validity: Sep 04, 2026 15:00:00

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Top of the Descending Channel Offers Opportunities for a Downside Move

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