AUD/CAD just bounced sharply from the range floor, but the Loonie could still have plenty of firepower.
Will Canada’s CPI confirm that oil-driven inflation is staying hot, or will a softer print give the Aussie room to extend its recovery?
Here’s what we’re seeing on the 4-hour time frame:
AUD/CAD: 4-hour
AUD/CAD 4-hour Forex Chart Faster with TradingView
Oil prices staged a strong recovery in July as supply concerns mounted in the Middle East, giving the Canadian dollar a leg up against its major counterparts.
Meanwhile, the resumption of US-Iran hostilities kept risk appetite in check, limiting demand for the risk-sensitive Australian dollar.
On the 4-hour chart, AUD/CAD remains trapped inside a roughly 200-pip range, with sellers holding the line near 0.9950 and buyers repeatedly stepping in around 0.9750.Remember that directional biases and volatility conditions in market price are typically driven by fundamentals. If you haven’t yet done your fundie homework on the Australian dollar and the Canadian dollar, then it’s time to check out the economic calendar and stay updated on daily fundamental news!
The latest drop reached the S1 Pivot Point and the bottom of the range support zone before buyers fired back with a sharp reversal candle. Price has since climbed toward the Pivot Point near 0.9800, where it’s currently hovering. Both moving averages remain above price and are still pointing lower, so the broader bias may be bearish despite the upswing.
Watch for bullish candlesticks above the 0.9800 Pivot Point as a sign that the rebound is gaining traction. Continued buying could carry AUD/CAD toward R1, then R2 at 0.98792 near the top of the range, especially if bulls manage to reclaim the moving averages.
On the other hand, sticky Canadian inflation or another oil surge tied to renewed U.S. Iran tensions could bring sellers back in. Bearish candles rejecting the 0.9800 area could send the pair toward S1 at 0.9753, with S2 at 0.9720 next in line if the range floor breaks.
Whichever bias you end up trading, don’t forget to practice proper risk management and stay aware of top-tier catalysts that could influence overall market sentiment!
This AUD/CAD setup is being shaped by oil prices lifting the Canadian dollar and risk-off sentiment capping the Aussie, and if the commodity currency dynamics behind this pair are unfamiliar, Premium members can read our lesson:
📖 Commodity Currencies and Their Hidden Drivers
Reading this helps you understand why oil prices move the Canadian dollar, how commodity exports shape demand for AUD, and why these two currencies can pull in opposite directions even under the same broad market conditions.
And if you’re not a Premium subscriber yet, now’s a good time to sign up.
With Babypips Premium, you get full access to School of Pipsology lessons that help you understand not just what the chart is showing, but the commodity and risk dynamics driving both sides of the pair.
