USD/CAD on hold ahead of BoC Decision

USD/CAD is showing limited movement on Wednesday. Early in the North American session, USD/CAD is trading at 1.3219, down 0.13%. With no tier-1 data out of Canada or the US on Wednesday, investors will be focused on the Bank of Canada policy meeting (14:00 GMT).

On Tuesday, the US dollar flexed some muscles on Tuesday and hammered its Canadian counterpart. USD/CAD climbed 1.05%, its highest one-day gain since June.

Bank of Canada likely to stay pat

Later on Wednesday, the Bank of Canada releases its monthly policy meeting. The bank slashed interest rates from 0.75% to 0.25% in March, and BoC Governor Tiff Macklem has stated that the bank will maintain these rate levels until at least 2023 and Macklem could repeat this pledge at the policy meeting. The bank has also promised to purchase C$5 billion in government bonds each week and to provide more stimulus if needed. Canada’s economy is showing promising signs of recovery, but with GDP plunging by 38.7% on an annualized basis, it’s no surprise that the BoC policymakers remain in a cautious mood. Bottom line? With the bank unlikely to make any dramatic announcements, today’s meeting could prove to be a sleeper for USD/CAD.

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USD/CAD Technical

  • 1.3288 is the first line of resistance. This is followed by resistance at 1.3338
  • 1.3137 is providing support. Below, there is support at 1.3021 which is protecting the symbolic 1.30 level
  • USD/CAD broke above the 20-day MA on Tuesday, which points to an upward trend for the pair

This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

Kenny Fisher

Kenny Fisher

Currency Analyst at Market Pulse
Kenny Fisher joined OANDA in 2012 as a Currency Analyst. Kenny writes a daily column about current economic and political developments affecting the major currency pairs, with a focus on fundamental analysis. Kenny began his career in forex at Bendix Foreign Exchange in Toronto, where he worked as a Corporate Account Manager for over seven years.
Kenny Fisher

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