Surging AUDCAD confirms advantage of bulls

The AUDCAD currency pair has been under the impact of a volatility surge in recent days. On Wednesday, the quotes hit a 2-month low, but by the end of the trading session the drawdown was almost bought back. Yesterday, the buyers finally seized the initiative, increasing the rate by more than 1%. Later, the pair’s dynamics will gradually stabilize, but the upward trend is highly likely to continue. The bulls' main target may become the level of 0.93.

The Reserve Bank of Australia (RBA) once again kept its key rate unchanged at 4.35% on Tuesday. In the quarterly report released after the meeting, the bank's officials stressed that inflation has been declining too slowly. According to their forecasts, by the end of the year, the country's core consumer price index is expected to be 3.4%, which is still quite far from the 2% target. The start of the monetary policy easing cycle is only anticipated in mid-2025.

Speaking to reporters on Thursday, RBA Governor Michelle Bullock did not overlook the results of the US presidential election. Donald Trump's policy could lead to a significant increase in inflation both globally and in Australia in particular, she said. Bullock did not name any specific figures, referring to the need for a thorough analysis of all possible scenarios. Anyway, the RBA Governor does not expect the price growth rate in the country to stabilize before 2026.

Meanwhile, the Bank of Canada released the minutes of its meeting on October 23, at which the key rate was cut by 0.5% at once. The bank's officials noted the need to reduce the borrowing costs in the country, especially in light of the government's new measures aimed at limiting migration. According to the Bank of Canada estimates, these actions will lead to a population decline of 0.2% in 2025 and 2026. An economy with such a limited inflow of labor requires looser monetary policy.

AUDCAD may slightly retreat from the reached peaks on Friday, but the benchmark at 0.93 will stay in the currency market participants' focus.

Consider the following trading strategy:

Buy AUDCAD in the range of 0.922–0.924. Take profit – 0.93. Stop loss – 0.919.