The Bank of Canada interest rate decision will be announced at 9:45 AM with the expectations of a 50 basis point cut in rates.
Adam outlines the fundamental view in his post here:
In my video below, I analyze the key technical levels influencing the USDCAD rate decision. With the pair trading near four-year highs at 1.4175, the sellers face the burden of proof to regain control from a technical standpoint. If they fail, the upward trend is likely to continue.
The next significant topside target lies at the April 2020 highs near 1.4270. Breaking above this level could pave the way for further upside momentum.
But what would shift the bias toward the downside? In other words, what could make buyers more cautious and give sellers greater confidence in a potential "sell the fact" correction?
On the hourly chart, a critical swing area from the past three weeks is at 1.4145. A move below this level would mark a minor victory for the sellers. Below that, the rising 100-hour moving average at 1.4127 and the swing area between 1.4086 and 1.4104 are the next targets. At the lower end of that range, the rising 200-hour moving average at 1.4087 adds further technical significance.
Until the price breaks below these levels, the buyers remain in control. While a sustained move below 1.4145 could gradually build seller confidence, maintaining momentum is crucial for a broader shift.
In the video, I delve deeper into these dynamics to help you stay informed and prepared in your trading decisions.
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Here are more detailed technical levels in play for the USDCAD ahead of the Bank of Canada interest decision:
Resistance Levels:
1.4175: Current price, near four-year highs and a potential short-term resistance level.
1.4270: April 2020 highs, a significant topside target and potential resistance level.
Support Levels:
1.4145: Critical swing area from the past three weeks, a minor victory for sellers if broken. This level has been tested multiple times and has held, making it a key support level.
1.4127: Rising 100-hour moving average, which has provided support to the pair in recent sessions.
1.4104-1.4086: Swing area, which has acted as support and resistance in the past. This range is likely to be closely watched by traders.
1.4087: Rising 200-hour moving average, which adds further technical significance to the 1.4104-1.4086 swing area.
Breakout and Reversal Levels:
Above 1.4270: A breakout above this level could pave the way for further upside momentum, with potential targets at 1.4350 and 1.4420.
Below 1.4086: A breakdown below this level could shift the bias toward the downside, with potential targets at 1.4050 and 1.4000.
