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CANADIAN DOLLAR / AUSTRALIAN DOLLAR

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CADAUD trade ideas

AUDCADAUD/CAD 10-Year Bond Yield Differential and Carry Trade Advantage from technically perspective .the current10year bond yields of Australia as at Friday close of the market is 4.39% approx. while that of Canada is 3.35% .the spread is 1.044% reinforcing the AUD's yield advantage. interest rate differential: +1.04% (AUD over CAD) Carry Trade Advantage The 1.04% yield spread makes AUD/CAD attractive for carry traders, who borrow low-yielding CAD to invest in higher-yielding AUD assets. For example: Borrowing CAD at 3.35% and investing in AUD bonds at 4.39% generates a 1.04% annualized return (before currency fluctuations). This spread is modest compared to pairs like GBP/JPY (3.21%), but still offers opportunities in stable market conditions. Key Drivers of the Yield Differential Australia (AUD): The Reserve Bank of Australia (RBA) cut rates to 3.85% in May 2025, citing progress on inflation and global uncertainty from US tariffs. Despite the cut, Australia’s 10-year yield remains elevated due to strong commodity exports (e.g., iron ore) and resilient growth. Canada (CAD): The Bank of Canada (BoC) maintains a restrictive policy stance, with inflation pressures persisting (trimmed-mean CPI at 3.1% in April). Canada’s 10-year yield has risen to a four-month high (3.35%) but lags behind AUD due to weaker commodity diversification and trade risks with the US. Risks to the Carry Trade Currency Volatility: AUD/CAD is in a bearish technical trend, with key support at 0.8953 and resistance at 0.9080. A breakdown could erase carry gains. US-China trade tensions and Trump’s proposed tariffs on allies like Canada add volatility, potentially weakening AUD further. Policy Shifts: The RBA may ease further if global growth slows, narrowing the yield spread. The BoC’s hawkish tilt could strengthen CAD if inflation remains sticky. Commodity Prices: AUD relies on iron ore and coal exports, while CAD is tied to oil. Diverging commodity trends could offset yield advantages. Conclusion The 1.04% yield differential provides a modest carry trade advantage for AUD/CAD. However, traders must weigh this against: Bearish technical trends threatening AUD depreciation. Geopolitical risks (US tariffs, China slowdown) impacting both currencies. Divergent central bank policies (RBA easing vs. BoC holding). While the yield spread supports long AUD/CAD positions, risk management (e.g., hedging currency exposure) is critical to preserve returns in volatile conditions. The interest rate differential (IRD) between Australia and Canada is critically important for traders considering long or short positions on the AUD/CAD currency pair because it directly influences capital flows, currency demand, and the profitability of carry trades. Here’s why: 1. Driver of Currency Demand and Supply When Australian interest rates are higher than Canadian rates, Australian assets (like government bonds) become more attractive to investors seeking higher returns. This increases demand for the Australian dollar (AUD) as foreign investors buy AUD to invest in these assets. Conversely, if Canadian rates rise relative to Australian rates, the Canadian dollar (CAD) gains appeal, increasing demand for CAD and potentially weakening AUD/CAD. Thus, the IRD affects the flow of funds between the two countries, impacting the exchange rate. 2. Impact on Carry Trade Strategy The carry trade involves borrowing in a currency with a lower interest rate and investing in a currency with a higher interest rate to profit from the yield difference. For AUD/CAD, if Australia’s interest rates exceed Canada’s, traders can borrow CAD at lower rates and invest in AUD assets, earning the positive interest rate differential as profit (known as rollover or swap gains). This makes long AUD/CAD positions attractive when the IRD is positive. Conversely, a negative IRD discourages such trades or favors short AUD/CAD positions. 3. Exchange Rate Movements Changes in the IRD signal shifts in monetary policy, economic strength, and inflation expectations, all of which influence exchange rates. For example, if the Reserve Bank of Australia (RBA) raises rates or signals tightening while the Bank of Canada (BoC) remains steady or cuts rates, the IRD widens, typically leading to AUD appreciation against CAD. Traders use IRD as a fundamental indicator to anticipate currency appreciation or depreciation. 4. Risk and Market Sentiment Considerations While IRD is a key factor, traders also consider risks such as geopolitical events, commodity price fluctuations (e.g., oil for Canada, iron ore for Australia), and overall market volatility. A favorable IRD can be offset by adverse risk factors, so traders combine IRD analysis with other economic and technical indicators. above all never forget market structure while making critical trade decision.
Short
by Shavyfxhub
3
Lingrid | AUDCAD potential Bearish Rally from KEY zoneFX:AUDCAD is forming a bearish continuation setup after a rejection from the lower high near the resistance trendline. Price is consolidating just below the key 0.89000 level, indicating weakness and potential for further downside. If bears maintain pressure and reject the retest, we could see a move toward the 0.88200 support zone. The downtrend remains intact as long as the pair trades below 0.89000. 📈 Key Levels Sell trigger: bearish rejection from 0.89000 Buy zone (short-term scalp only): around 0.88200 Target: 0.88200 Buy trigger: break and hold above 0.89000 💡 Risks Sharp reversal at 0.88200 could trap sellers Break above 0.89000 would invalidate bearish view Volatility expected due to CAD-linked commodities and AUD data Traders, if you liked this idea or if you have your own opinion about it, write in the comments. I will be glad 👩‍💻
Short
by Lingrid
4
AudCad..PWL taken!!Good day traders, I’m back with another setup on AudCad and I like that previous week low was taken. We can now look at the power of 3 with higher TF in mind. On the 4H TF price has been bearish but we can see that price left very “smooth” highs(relative equal highs) but ICT teaches us that price will always go back to make the smooth highs, smooth cries(liquidity sweep). Before price took our low it left a FVG that’s we wanna see turn into an inverse. The first target has to be our internal liquidity than the external liquidity that also has relatively equal highs too.
Long
by FxPipMaster_TebohoMatla
1
Potential bearish drop?AUD/CAD is rising towards the pivot and could drop from this level to the 1st support. Pivot: 0.89626 1st Support: 0.87895 1st Resistance: 0.90356 Risk Warning: Trading Forex and CFDs carries a high level of risk to your capital and you should only trade with money you can afford to lose. Trading Forex and CFDs may not be suitable for all investors, so please ensure that you fully understand the risks involved and seek independent advice if necessary. Disclaimer: The above opinions given constitute general market commentary, and do not constitute the opinion or advice of IC Markets or any form of personal or investment advice. Any opinions, news, research, analyses, prices, other information, or links to third-party sites contained on this website are provided on an "as-is" basis, are intended only to be informative, is not an advice nor a recommendation, nor research, or a record of our trading prices, or an offer of, or solicitation for a transaction in any financial instrument and thus should not be treated as such. The information provided does not involve any specific investment objectives, financial situation and needs of any specific person who may receive it. Please be aware, that past performance is not a reliable indicator of future performance and/or results. Past Performance or Forward-looking scenarios based upon the reasonable beliefs of the third-party provider are not a guarantee of future performance. Actual results may differ materially from those anticipated in forward-looking or past performance statements. IC Markets makes no representation or warranty and assumes no liability as to the accuracy or completeness of the information provided, nor any loss arising from any investment based on a recommendation, forecast or any information supplied by any third-party.
Short
by ICmarkets
AUD/CAD: Ducks in a Row for a Drop Below .8880?The ducks look to be lining up for AUD/CAD downside. It was comprehensively rejected at the 200DMA a fortnight ago, followed by wedge break on Tuesday before sliding below the 50DMA on Thursday. It now sits perched on .8880, a level it attracted buying from earlier this month. With RSI (14) sub-50 and MACD crossing over from above, momentum signals are shifting neutral to moderately bearish, favouring downside. With both moving averages trending lower, it reinforces the bearish picture. If AUD/CAD breaks beneath .8880, considering initiating shorts targeting a return to support at .8800. A stop above .8880 would provide protection against reversal. Should it hold .8880, the bearish backdrop suggests there are better setups to consider than flipping the trade and going long. Good luck! DS
Short
by FOREXcom
1
D & 4H 50 EMA HOLD? AUDCAD SHORT FORECAST Q2 W22 D28 Y25🔥DAILY & 4H 50 EMA POI HOLD SOUTH... AUDCAD SHORT FORECAST Q2 W22 D28 Y25 Professional Risk Managers👋 Welcome back to another FRGNT chart update📈 Diving into some Forex setups using predominantly higher time frame order blocks alongside intraday confirmation breaks of structure. 💡Here are some trade confluences📝 ✅Weekly 50 EMA ✅Weekly order block rejection ✅Daily order block rejection ✅15’ order block identification 🔑 Remember, to participate in trading comes always with a degree of risk, therefore as professional risk managers it remains vital that we stick to our risk management plan as well as our trading strategies. 📈The rest, we leave to the balance of probabilities. 💡Fail to plan. Plan to fail. 🏆It has always been that simple. ❤️Good luck with your trading journey, I shall see you at the very top. 🎯Trade consistent, FRGNT X
Short
by JCFRGNT
AUDCAD Approaching a Breakout Amid RBA Rate CutAUDCAD Approaching a Breakout Amid RBA Rate Cut AUDCAD is nearing a breakout from a larger triangle pattern. In the past few hours, the pair dropped nearly 50 pips following the Reserve Bank of Australia's (RBA) interest rate decision. The RBA cut rates by 25 bps , bringing them down to 3.85% from 4.1%. They also signaled a willingness to continue cutting if needed to support the economy. This marks the first rate cut in a long time where the RBA has openly backed a rate-cutting cycle, leading to a mild sell-off in AUD pairs. AUDCAD could decline further in the coming hours as the US market reacts to the news. You may find more details in the chart! Thank you and Good Luck! ❤️PS: Please support with a like or comment if you find this analysis useful for your trading day❤️ Disclosure: I am part of Trade Nation's Influencer program and receive a monthly fee for using their TradingView charts in my analysis.
Short
by KlejdiCuni
3
AUD/CAD - Strong Sell setup for Bearish movementsHere we can see that we are in a consolidation zone trading in a Bullish channel. We have a Liquidity Trend Acting as a support zone for price. We are currently waiting for a breakout trade here and actively looking to possibly sell from this active supply zone if we pull into it. I do belive we may sell off sooner but time will tell. Confluences are a failed Demand zone Bearish Breakout Trend Engulfing Bearish Candle theory Good luck to any traders that may decide to follow. I have 3 Target levels marked out so feel free to follow along and use these levels
Short
by jamesibartram
AUDCAD The Target Is UP! BUY! My dear friends, Please, find my technical outlook for AUDCAD below: The instrument tests an important psychological level 0.8873 Bias - Bullish Technical Indicators: Supper Trend gives a precise Bullish signal, while Pivot Point HL predicts price changes and potential reversals in the market. Target - 0.8918 Recommended Stop Loss - 0.8850 About Used Indicators: Super-trend indicator is more useful in trending markets where there are clear uptrends and downtrends in price. Disclosure: I am part of Trade Nation's Influencer program and receive a monthly fee for using their TradingView charts in my analysis. ——————————— WISH YOU ALL LUCK
Long
by AnabelSignals
1
HOT PICK ALERT AUDCAD SHORT FORECAST Q2 W22 Y25HOT PICK ALERT AUDCAD SHORT FORECAST Q2 W22 Y25 SELL SELL SELL Professional Risk Managers👋 Welcome back to another FRGNT chart update📈 Diving into some Forex setups using predominantly higher time frame order blocks alongside confirmation breaks of structure. 💡In depth trade confluences provided during the week 📝 🔑 Remember, to participate in trading comes always with a degree of risk, therefore as professional risk managers it remains vital that we stick to our risk management plan as well as our trading strategies. 📈The rest, we leave to the balance of probabilities. 💡Fail to plan. Plan to fail. 🏆It has always been that simple. ❤️Good luck with your trading journey, I shall see you at the very top. 🎯Trade consistent, FRGNT X
Short
by JCFRGNT
POI = LIQUIDITY AUDCAD SHORT FORECAST Q2 W22 D29 Y25 AUDCAD SHORT FORECAST Q2 W22 D29 Y25 POI = LIQUIDITY = Let's print money! Professional Risk Managers👋 Welcome back to another FRGNT chart update📈 Diving into some Forex setups using predominantly higher time frame order blocks alongside intraday confirmation breaks of structure. 💡Here are some trade confluences📝 ✅Weekly 50 EMA ✅Weekly order block rejection ✅Daily order block rejection ✅15’ order block identification 🔑 Remember, to participate in trading comes always with a degree of risk, therefore as professional risk managers it remains vital that we stick to our risk management plan as well as our trading strategies. 📈The rest, we leave to the balance of probabilities. 💡Fail to plan. Plan to fail. 🏆It has always been that simple. ❤️Good luck with your trading journey, I shall see you at the very top. 🎯Trade consistent, FRGNT X
Short
by JCFRGNT
AUDCAD Long Setup – Bullish Momentum BuildingI'm currently eyeing buy opportunities on AUDCAD. The pair is showing bullish structure with higher lows forming, and price is approaching a key support zone that has held well in the past. I’m anticipating a continuation to the upside if price confirms with bullish momentum or candlestick signals. Key support: 0.89050 Target area: 0.89550 Stop-loss: 0.88850 Waiting for confirmation before entering. Open to any thoughts or alternative views!
Long
by Trader_Justinnn