Anyone planning on trading the BOC and FOMC decisions today?
Here’s a simple dollar bullish setup I’m watching on USD/CAD.
Before moving on, ICYMI, yesterday’s watchlist checked out a break-and-retest setup on EUR/AUD. Be sure to check out if it’s still a valid trade!
And now for the headlines that rocked the markets in the last trading sessions:
Fresh Market Headlines & Economic Data:
BOJ Summary of Opinions: Seeing higher inflation but unlikely to go past targetNew Zealand credit card spending rebounded by 1.2% after previous 0.4% dip
Switzerland’s Credit Suisse economic expectations index up from 0.0 to 9.5
OPEC+ planning on sticking with modest output hike?
Asian shares pause from selloff ahead of FOMC decision
Upcoming Potential Catalysts on the Forex Economic Calendar:
BOC monetary policy decision at 3:00 pm GMT
U.S. EIA crude oil inventories at 3:30 pm GMT
BOC press conference at 4:00 pm GMT
FOMC monetary policy decision at 7:00 pm GMT
FOMC press conference at 7:30 pm GMT
New Zealand quarterly CPI at 9:45 pm GMT
Use our new Currency Heat Map to quickly see a visual overview of the forex market’s price action! 🔥 🗺️
What to Watch: USD/CAD
It’s gonna be a busy New York session with a couple of central bank announcements lined up!
The BOC is first up, and there are pretty strong expectations for a rate hike this time. Will they or won’t they?If they do deliver, I’m expecting the Loonie’s rally to be short-lived since this scenario has been priced in for a while. On the other hand, refraining from tightening for now might encourage Loonie bears to come out.
I’m looking at USD/CAD today since things are bound to get even more exciting during the FOMC decision.
No actual changes are expected for now, but we might actually get some hints on the timing of their first interest rate increase for the year. Many expect the Fed to point to a March hike, and this could be a very bullish case for the dollar.
If so, USD/CAD could bounce off the area of interest spanned by the 50% to 61.8% Fib retracement levels and make its way back to the swing high.
Technical indicators support this move, as the 100 SMA is above the 200 SMA while Stochastic looks ready to pull higher from the oversold region.
Better account for additional volatility when setting stops for this setup!