The AUDCAD currency pair has returned to traders' watchlists as diverging monetary policy expectations and domestic economic conditions continue to influence both the Australian Dollar (AUD) and the Canadian Dollar (CAD). At the time of writing, AUDCAD is trading around 0.9785, after fluctuating between 0.9769 and 0.9823 during the latest trading session. From a fundamental perspective, the Australian Dollar has found support as markets increasingly expect the Reserve Bank of Australia (RBA) to maintain a restrictive monetary policy for longer. Although headline inflation has moderated, Australia's trimmed mean inflation remains at 3.6%, still well above the RBA's target range of 2% to 3%. This has reduced expectations of an early interest rate cut and continues to provide underlying support for the AUD. In addition, investor sentiment toward the Australian Dollar remains closely linked to developments in China. As Australia's largest trading partner, any signs of stronger economic activity or additional stimulus measures from China could improve demand for Australian exports and strengthen the AUD further. Meanwhile, attention in Canada remains focused on the Bank of Canada (BoC) and the country's domestic economic outlook. The BoC has kept its benchmark interest rate at 2.25%, but policymakers continue to balance persistent inflation against signs of slowing economic growth. This has created uncertainty over the central bank's next policy move and kept the Canadian Dollar trading without a clear directional bias. The Canadian Dollar is also closely tied to crude oil prices. Recent weakness in oil has weighed on the currency as concerns over slower global demand have outweighed geopolitical supply risks. Given that Canada is one of the world's largest oil exporters, softer energy prices could continue to limit the CAD's upside in the near term. From a technical perspective, AUDCAD continues to trade within a constructive medium-term structure, although bullish momentum has slowed as the pair approaches the key psychological resistance level around 0.9800. This area is likely to determine the pair's next major directional move. A sustained break above 0.9800 could open the door for further gains toward the 0.9850–0.9900 region. Conversely, failure to break this resistance may trigger profit-taking, with prices potentially retreating toward the 0.9720–0.9750 support zone. Looking ahead, traders will closely monitor Australia's inflation outlook, economic developments in China, crude oil prices, and any comments from Bank of Canada officials. These factors are expected to remain the primary drivers of AUDCAD throughout the week. Overall, the outlook for AUDCAD remains bullish to neutral. Australia's relatively stronger fundamentals continue to support the Australian Dollar, while uncertainty surrounding Canada's economic outlook and weaker oil prices may limit further appreciation of the Canadian Dollar. Nevertheless, traders should remain alert to upcoming economic releases, as they could quickly shift market sentiment and influence the pair's near-term direction. Disclaimer This analysis is provided for informational purposes only and should not be considered as investment advice. All trading involves risk, including the potential loss of capital.