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The BOC is up this week! What are traders expecting and how can it affect CAD’s trends?

Here are potential catalysts you need to know about:

BOC’s policy decision (Apr 15, 2:00 pm GMT)

  • Bank of Canada (BOC) cut its interest rates by a total of 125 basis points to a 2010 low of 0.25% in March
  • Analysts don’t expect any policy changes from BOC this week
  • The presser at 3:15 pm GMT will likely hint at BOC’s outlook and plans in the foreseeable future

Oil price updates

  • Over the weekend, OPEC and friends have agreed to cut production by 9.7M barrels per day
  • Non-members like Brazil, Canada, Indonesia, Norway are expected to contribute 4 to 5M bpd
  • Crude oil prices rallied at the news, but doubts remain as markets doubt the cut would be enough to offset the drop in demand from the coronavirus outbreak
  • Oil price trends can affect demand for CAD in the next few days

Market risk appetite

  • Potential catalysts from the other major economies, such as the U.S. retail sales and initial jobless claims, China’s GDP, and Australia’s labor market numbers can affect demand for the high-yielding CAD
  • The number of COVID-19 cases will be looked at closely for signs that the pandemic has peaked

Technical snapshot

  • Stochastic thinks CAD is “oversold” against AUD and NZD on the daily time frame
  • CAD might be “overbought” against CHF, EUR, and USD

  • USD/CAD could see a retracement or reversal on the daily time frame
  • CAD continues to trade above the 200 SMA against AUD and NZD even as it stays below the 5, 20, and 50 SMA on the daily time frame

  • CAD has been most volatile against AUD, NZD, and JPY in the last seven days