USDCAD Manages to Breach 1.30 Price Handle Ahead of BOC Rate Statement

The USD/CAD pair rose to its highest trading-level since March 21st on Monday, briefly moving above the key 1.3000 handle and hitting an intraday high of 1.3021. The USD/CAD pair fared well in thin Bank Holiday trading conditions, with the U.S. Dollar Index continuing to trade well above the 94.00 level while U.S. oil prices fell over one percent lower on the day. During Asian market hours of Tuesday, the pair saw slight ease of momentum as the pair fell back into 1.29 handle but has since then managed to move range bound between 1.2980 to 1.3011 price ranges. CAD traders are likely to become increasingly cautious as the Bank of Canada policy decision approaches tomorrow. The BOC is expected to keep interest rates on hold at this week’s meeting as NAFTA tensions linger, although future rate hikes remain possible as the Canadian economy is faring well with low domestic unemployment, stable inflation, and rising oil prices. However the macro calendar has no update in Canadian market session today.

USDCAD Rises

The positive tone around the greenback remains intact, today supported by risk aversion. Also, crude oil prices weigh on the Loonie. The WTI was trading at $66.65, 8.4% below the level it had a week ago. When looking at the pair in technical perspective, we can see that strong upside momentum continues to dominate the US Dollar against the Canadian Dollar as the pair has been supported by the 55– hour simple moving average since last week.

If the pair manages to hold above 1.2900 level till BOC decision and if the BOC interest rate remains unchanged as expected we can see an increase in Bid action in favor of US greenback which could help the pair breach March 2018’s high at 1.31247 and ascend onto new uptrend movement. However bull and bear are both at war over control for the pair’s momentum and a fall below 1.2930 before BOC interest rate decision could result in favor of Loonie gaining the upper hand. Expected support and resistance for the pair are at 1.2990 /1.2955 /1.2925 and 1.3050 /1.3080 /1.3085 respectively.