Market Analysis: All Eyes on the BOC Rate Decision – USD/CAD Bulls with the Advantage on Their Side
Source: Economic Events 24 October 2018 - Admiral Markets' Forex Calendar
The fundamental main event of today is clearly the rate decision of the BoC (Bank Of Canada) at 3pm BST. As we have already pointed out in Admiral Markets' weekly outlook this past Monday, the BoC rate decision is, after the ECB rate decision tomorrow, potentially the second most interesting news event of the week. At first glance, with markets expecting the BoC to hike the rate by 25 basis points, one might come to the conclusion that the Loonie has at least some bullish hours ahead of it. In fact, this seems far from the truth. After consumer prices came in below expectation last Friday for September YoY at only 2.2% (instead of 2.7%), the USDCAD currency pair stabilized around its pre-weekly highs around 1.3130. When taking a small step back, we can clearly identify a sequence of higher highs and lows on an 4-hour chart, since the beginning of October and the consolidation around 1.3100 can clearly be considered bullish.
That being said, and if we get a push above the pre-weekly highs of around 1.3130 (probably initiated by a "dovish hike" from the BoC), a first target can be found around 1.3180/3200, the region around the weekly pivot point R1, falling together with the region around the September highs. If the bulls take on enough momentum and re-conquer the 1.3200 mark, a move up to the July highs and the weekly pivot point R2 around 1.3270 seems possible. This is only the case if the USD/CAD currency pair drops back below 1.3000/3030 and the weekly PP, the bulls would then lose their current positive outlook:
Source: USDCAD 4 Hour Chart - Admiral Markets MT5 with MT5SE Add-on - Accessed: 23 October 2018, 11:00 PM CEST
This material does not contain and should not be construed as containing investment advice, investment recommendations, an offer of or solicitation for any transactions in financial instruments. Please note that such trading analysis is not a reliable indicator for any current or future performance, as circumstances may change over time. Before making any investment decisions, you should seek advice from independent financial advisors to ensure you understand the risks.
