Canadian Dollar, USDCAD Outlook Talking Points:
Do you want to see how retail traders are currently trading the US Dollar[1]? Check out our IG Client Sentiment Indicator[2].
USDCAD Rally to Range Resistance Ahead of Bank of Canada
The range continues in USDCAD[3], and this comes despite last week’s threatening test of support on Wednesday, at which point prices in the pair temporarily tested below the zone that’s helped to hold the lows since late-April. At that point, buyers returned, helped by a bullish trend-line that connects support in the pair since late-February, and staged another topside push back up to resistance in USDCAD[4]. Tomorrow brings a Bank of Canada rate decision with the wide-expectation of no moves, begging the question as to whether the BoC tips their hand toward future rate cuts after getting more dovish at the April rate decision.
USDCAD Four-Hour Price Chart
Chart prepared by James Stanley[5]
Last week’s support test in USD/CAD[6] was short-lived. Prices in the pair had tilted-lower leading into Wednesday trade, at which point a disappointing data point was released with Canadian retail sales figures[7]. That print hit at 8:30 AM ET last Wednesday, and that syncs well with the short-term reversal of price action in the pair, when prices quickly pivoted from below support and all the way back to resistance over the next 24 hours. That resistance hold held into the open of the fresh week, and as US markets come back online after the Monday holiday, USD/CAD price action is pushing right back towards range resistance.
USDCAD 30-Minute Chart
Chart
