BOC expected to keep rates unchanged
The Bank of Canada interest rate decision is at 1400 GMT (10 am ET) on Wednesday. There’s universal consensus that the overnight rate will be left at 0.25% and there is no press conference afterwards. The only communication we will be getting is the press release and given everything that’s happened since we last heard from the BOC, expectations for any kind of monetary shift are low.
The economy has underperformed since the last meeting as a result of the shutdown, but there are some thinking that the higher inflation might solicit a comment.
Looking at the USDCAD, the pair is moving lower ahead of the decision and is trading at new session lows (the USD is generally moving lower along with the USDCADs decline). The pair is trading to new session lows and in the process, has moved below and away from the 200 hour MA at 1.20775. The price is also below the 50% midpoint of the trading range since the May 20 high. That level comes in at 1.20749. It will take a move back above those levels (and the higher 100 hour MA at 1.20931), to give the buyers more control. Stay below and the sellers hold control (higher CAD).
The low from Monday reached 1.2056. Below that, and traders will be eying the 1.20397 to 1.20461 swing area. Below that and 1.20269 to 1.20296 will be targeted.