The USDCAD traders set up for the BOC rate decision tomorrow

The USDCAD USD/CAD The USD/CAD is the currency pair encompassing the dollar of the United States of America (symbol $, code USD), and the Canadian dollar of Canada (symbol $ code CAD). The pair’s exchange rate indicates how many Canadian dollars are needed in order to purchase one US dollar. For example, when the USD/CAD is trading at 1.3500, it means 1 US dollar is equivalent to 1.35 Canadian dollars. The US dollar (USD) is the world’s most traded currency, whilst the Canadian dollar (CAD) is the world’s seventh The USD/CAD is the currency pair encompassing the dollar of the United States of America (symbol $, code USD), and the Canadian dollar of Canada (symbol $ code CAD). The pair’s exchange rate indicates how many Canadian dollars are needed in order to purchase one US dollar. For example, when the USD/CAD is trading at 1.3500, it means 1 US dollar is equivalent to 1.35 Canadian dollars. The US dollar (USD) is the world’s most traded currency, whilst the Canadian dollar (CAD) is the world’s seventh Read this Term is trading up and down today, but remains below key MA levels to the topside. ON the daily chart, the pair is about 100 pips below the 100/200 day MAs near 1.3512.

Drilling in to the hourly chart, the pair is below the falling 100 hour MA at 1.3467.

It would take a move above the daily MAs and the falling 100 hour MA to tilt the technical bias back to the upside. It is the risk for the sellers looking for more downside momentum perhaps helped by a hawkish BOC tomorrow.

The Bank of Canada Bank of Canada The Bank of Canada (BOC) is the central bank of Canada. It was created in 1934 and is responsible for implementing monetary policy in the country, issuing currency, and promoting a safe and stable financial system.The Bank's main role is to "promote the economic and financial welfare of Canada," as defined in the Bank of Canada Act. This includes maintaining the stability of the financial system, promoting a sound and efficient financial system, and fostering monetary conditions that will preser The Bank of Canada (BOC) is the central bank of Canada. It was created in 1934 and is responsible for implementing monetary policy in the country, issuing currency, and promoting a safe and stable financial system.The Bank's main role is to "promote the economic and financial welfare of Canada," as defined in the Bank of Canada Act. This includes maintaining the stability of the financial system, promoting a sound and efficient financial system, and fostering monetary conditions that will preser Read this Term (BoC) will make their interest-rate decision at 10:00 EDT. The consensus among economists is that the rates will remain unchanged at 4.5%.

However, recent stronger-than-expected GDP (3.1% vs 2.4% est), CPI data (4.4% above the expected 4.1% YoY), and jobs figures (+41.4K vs 20 est), have raised speculation about a possible 25bps rate hike. The vast majority of economists still expect unchanged. However the markets are pricing in a 43% chance of a 25 basis points hike.

Governor Macklem and the Governing Council have hinted at the possibility of a rate hike in the near future, as per the minutes of the April meeting. Persistent inflation, resilient economic growth, and the risk of delaying action were the main factors supporting the case for a rate rise.

That hike risk, has traders leaning in the downward direction for the USDCAD (higher CAD) from a technical perspective.