USD/CAD Price Forecast: Surging oil prices lift Canadian Dollar

The AUD/USD currency pair is currently trading above the 0.7200 level during the Asian session on Tuesday, having reached its highest point since May 14. The US Dollar is experiencing pressure as a strong rally in the Japanese Yen outpaces support from hawkish Federal Reserve expectations and geopolitical concerns. This, coupled with anticipations of another interest rate increase by the Reserve Bank of Australia (RBA) later in the month, is providing a tailwind for the Australian Dollar.

However, traders are not taking any new directional bets and are waiting for the release of the latest US inflation data this week. From a technical standpoint, the recent close above the 0.7200 mark follows a significant rally from the important 200-day Simple Moving Average (SMA), which was tested in June. This validates a near-term constructive outlook.

Momentum indicators are also supportive, with the Relative Strength Index (RSI) being in bullish territory just below overbought levels and the Moving Average Convergence Divergence (MACD) line displaying a small positive spread. This indicates that the upside pressure is strong but becoming more established. Should there be a corrective pullback towards the 0.7145 support level, it is more likely to attract buying interest and remain limited.

However, a decisive break below this level could lead to additional technical selling and potentially drive the AUD/USD pair below the 0.7100 mark. The 200-day SMA around 0.6992 serves as a crucial medium-term support reference. As long as the spot prices remain above this significant gauge, the overall bias is expected to remain favorable for further gains, even if there are near-term consolidations or corrective movements.

On the upside, the multi-year peak at 0.7272 represents the next notable resistance level. A daily close above this threshold would open the path for further gains. Haresh Menghani, a seasoned professional with over a decade of experience in analyzing global financial markets, has provided this technical analysis.