AUD/CAD dips toward 0.917 as BoC’s larger cut collides with firmer CPI

Market overview

AUD/CAD is softer after a two-step Canadian mix: a bigger-than-expected BoC cut to 2.50% (vs 2.75% expected) initially weighed on the loonie, but that impulse was tempered by August CPI holding up (headline 2.0% YoY, core measures near 3% y/y), keeping Canadian yields from sliding.

On the Australian side, attention turns to Thursday’s labour report (employment seen +21k, jobless 4.2%) and an RBA appearance before it, while China’s latest data pulse remains a modest headwind for commodity FX. Energy headlines from the IEA highlighting faster natural decline rates in oil & gas fields keep medium-term support under crude (CAD-positive) but don’t offset the immediate policy-cut drag.

Net: near-term flows are choppy, but with policy easing already delivered in Canada and Australia’s data risk ahead, AUD/CAD is consolidating off last week’s highs.

Technical analysis (four-hour)

Current conditions and main scenario

Price has rolled over from the 0.9220 swing high (red “0%” on the chart) and is now oscillating around the last swing low at 0.9174. The pullback sits beneath the 20-SMA mid-band and below the prior micro-base, keeping pressure tilted lower while 0.9192 (61.8%) caps. A sustained 4h close below 0.9174 (100%) would likely extend the correction toward the fib extensions at 0.9161 (127.2%) and 0.9145 (161.8%). The broader support zone aligns with the 100-WMA (grey) now near 0.9150, and the lower extension at 0.9127 (200%).

Oscillators

• MACD: histogram below zero and drifting lower; signal crossover favors bears but momentum is not impulsive.
• MFI ~25: leaning toward oversold—pace of decline may slow near supports.
• OBV: trending down since last week, confirming distribution on rallies.

Key levels

• Resistance: 0.9192 (61.8%), 0.9205/0.9210 (intraday supply), 0.9220 (recent top).
• Support: 0.9174 (recent bottom), 0.9161 (127.2%), 0.9150 (100-WMA grey), 0.9145 (161.8%), then 0.9127 (200%).

Alternative scenario

If buyers defend 0.9174 and reclaim 0.9192 on a closing basis, a squeeze toward 0.9205/0.9210 becomes likely, with scope to retest 0.9220. A break above 0.9220 would neutralize the pullback and reopen 0.9240/0.9260 in extension.

Fundamental outlook

• Canada: A larger BoC cut to 2.50% argues for softer CAD in coming weeks, but the CPI mix (common 2.5%, median 3.1%, trimmed 3.0%) and better-than-expected manufacturing/wholesale sales cushion the downside. Housing starts and foreign securities flows arrive next; Friday’s retail sales will update domestic demand. Energy-complex support from the IEA’s decline-rate analysis is a medium-term CAD tailwind if crude holds firmer.
• Australia: The near-term swing factor is Thursday’s labour market report. A solid headline and steady participation would keep RBA-tight-for-longer probabilities alive and support AUD on dips. A miss (soft jobs or higher unemployment) would undermine the bounce and favor further AUD/CAD pullback toward the 0.9150–0.9130 supports.
• Global USD conditions: With the Fed decision later in the week and US data (retail sales/production) due, broad USD gyrations can spill over into crosses; risk sentiment tied to China’s growth pulse remains a background driver for AUD.

Bottom line

While 0.9192 caps, the path of least resistance is a grind lower toward 0.9161/0.9145, with 0.9150 (100-WMA) a pivotal buffer. Strong Aussie jobs could flip the script and send price back to 0.9192–0.9220; weak jobs would validate the downside extension to 0.9127.