USD/CAD: BoC rate decision and 1.3500 on Wednesday in focus
Source: Economic Events 29 May 29, 2019 - Admiral Markets' Forex Calendar
The USD/CAD finds itself in a very interesting spot before today's Bank of Canada rate decision. While no significant change in the monetary policy is expected, and the BoC can be expected to hold interest rates at the current level for an extended period of time, any switch in one direction or the other could cause increased volatility.
After Canada posted the largest one-month gain in net jobs on record at the beginning of the month (which countered some of the rhetoric we've seen from the Bank of Canada at the last meeting in April where she nearly fully abandoned its bias towards raising interest rates), it will be interesting to see whether BoC Governor Poloz will again try to direct the statement in direction of the Canadian economic outlook or if he will start an attempt to somehow down-talk the CAD by focusing a little more on the deterioration in the trade relationship between the US and China, and the potential headwinds Canada's economy could face resulting from that.
If we get to see such an indirect 'down-talk-attempt', finally a break above 1.3500, levelling the path up to the current yearly highs around 1.3670 in USD/CAD could be the result.
On the other hand: focus may still be on the positive economic developments in Canada, with market participants reading a slight hawkish touch despite the established neutral expectation in regards to rate hikes, which could trigger an attempt to break below 1.3280/3300 and out of the trend channel - activating an initial target on the downside around 1.3170:
Source: Admiral Markets MT5 with MT5-SE Add-on USD/CAD Daily chart (between February 26, 2018, to May 28, 2019). Accessed: May 28, 2019, at 10:00pm GMT - Please note: Past performance is not a reliable indicator of future results, or future performance.
In 2014, the value of the USD/CAD increased by 9.4%, in 2015, it increased by 19.1%, in 2016, it fell by 2.9%, in 2017, it fell by 6.4%, in 2018, it increased by 8.4%, meaning that after five years, it was up by 28.4%.
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