USD/CAD Holds Narrow Range Ahead of Bank of Canada (BoC) Comments

Canadian Dollar Talking Points

USD/CAD binds a slight operation as Bank of Canada (BoC) Governor Stephen Poloz is slated to pronounce during a Greater Victoria Chamber of Commerce, and a uninformed collection of executive bank tongue might lean a near-term opinion for a dollar-loonie sell rate as marketplace participants import a opinion for financial policy.

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USD/CAD Holds Narrow Range Ahead of Bank of Canada (BoC) Comments

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The updates to Canada’s Consumer Price Index (CPI) might pull a BoC to adopt a some-more light proceed in normalizing financial process as it falls brief of expectations, and Governor Poloz might try to tame expectations for an approaching rate-hike as ‘the Bank will continue to consider a economy’s attraction to seductiveness rate movements and the enlargement of mercantile capacity.’

However, a BoC appears to be on lane to exercise aloft borrowing-costs over a entrance months as ‘developments given Apr serve strengthen Governing Council’s perspective that aloft seductiveness rates will be fitting to keep acceleration nearby target,’ and a executive bank might continue to ready Canadian households and businesses for a reduction accommodative position as ‘core measures of acceleration sojourn nearby 2 per cent, unchanging with an economy handling tighten to potential.

As a result, a slew of hawkish comments might trigger a pullback in USD/CAD, with a span during risk of exhibiting a some-more bearish function over a entrance days generally as a Relative Strength Index (RSI) flashes a text sell-signal and slips subsequent 70.

USD/CAD Daily Chart

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  • Keep in mind, a broader opinion for USD/CAD stays constructive as a span rallies to uninformed 2018 highs, with a Relative Strength Index (RSI) fluctuating a bullish arrangement from May, though a unsuccessful try to exam a 1.3420 (78.6% retracement) to 1.3460 (61.8% retracement) segment might lead to a near-term improvement in a sell rate.
  • First downside jump comes in around a former-resistance section around 1.3130 (61.8% retracement) followed by a Fibonacci overlie around 1.2980 (61.8% retracement) to 1.3030 (50% expansion), with a subsequent area of seductiveness entrance in around 1.2830 (38.2% retracement).

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— Written by David Song, Currency Analyst

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