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The BOC is up this week!

What are analysts expecting from the event and which potential catalysts can move the Loonie?

I’ve got a list!

BOC’s statement (June 3, 2:00 pm GMT)

  • In mid-April Bank of Canada (BOC) maintained its 0.25% interest rates and introduced tens of billions worth of market operations
  • CAD paused from its losses at the time, though it wasn’t until the next day when it found its intraweek bottom
  • Analysts don’t expect policy changes from BOC this week
  • It’s Poloz’ last stint as Governor before he gets replaced by Tiff Macklem. Watch out for hints of his policy biases

Labor market reports (June 5, 12:30 pm GMT)

  • Canada shed a record 1.99 million jobs in April, double the 1 million job losses in March
  • Unemployment rate jumped from 7.8% to 13.0% while participation rate dropped from 63.5% to 59.8%
  • CAD still maintained its intraday gains thanks to vaccine and reopening of economy prospects
  • Canada is printing labor market numbers AT THE SAME TIME as the U.S. NFP reports
  • Another 500,000 workers may have lost jobs in May
  • Analysts see the jobless rate rocketing to 15% in May
  • The IVEY PMI (June 5, 2:00 pm GMT), which is usually a leading indicator, is printed after the official numbers

Market risk sentiment

  • Pandemic headlines (end of lockdown measures, vaccine prospects, stimulus programs) will continue to affect risk taking in the markets
  • Resumption of economic activities could improve demand for oil (and oil-related CAD)
  • Top-tier reports (RBA and ECB decisions, PMI reports, NFP numbers) can influence risk appetite during their releases

Technical snapshot

  • Stochastic sees the Loonie as “overbought” against the dollar and yen
  • CAD might be “oversold” against its fellow comdolls on the daily
CAD Forex Pairs Stochastic from MarketMilk
CAD Forex Pairs Stochastic from MarketMilk.
  • Bollinger Band traders should watch the Loonie’s “oversold” against the Aussie
CAD Forex Pairs Bollinger Bands from MarketMilk
CAD Forex Pairs Bollinger Bands from MarketMilk
  • 50 and 200 SMAs suggest that the Loonie’s bearish trends might be weakening on the daily chart
CAD Forex Pairs SMAs from MarketMilk
CAD Forex Pairs SMAs from MarketMilk
  • CAD was most volatile against AUD, JPY, CHF, and USD in the last seven days
CAD Forex Pairs Volatility from MarketMilk
CAD Forex Pairs Volatility from MarketMilk

Missed last week’s price action? Read CAD’s price recap for May 25 – 29!