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The BOC decision is coming up, fellas!

Will this bring a retracement opportunity for this ongoing USD/CAD downtrend?

Before moving on, ICYMI, yesterday’s watchlist looked at EUR/USD’s rising wedge pattern ahead of the eurozone flash CPI release. Be sure to check out if it’s still a valid play!

And now for the headlines that rocked the markets in the last trading sessions:

Fresh Market Headlines & Economic Data:

U.S. CB consumer confidence index down from 108.6 to 106.4 vs. 103.9 forecast

Australian AIG manufacturing index down from 58.5 to 52.4

U.K. BRC price shop index ticked higher from 2.7% to 2.8%

Japanese Q1 capital spending up by 3.0% vs. 3.7% forecast, 4.3% previous

BOJ official Wakatabe: Need for additional easing not very high for now

Australian economy grew by 0.8% vs. 0.6% forecast in Q1 2o22

Chinese Caixin manufacturing PMI up from 46.0 to 48.1 vs. 49.1 consensus

German retail sales tumbled by 5.4% vs. projected 0.5% dip

U.K. Nationwide HPI up by 0.9% vs. 0.6% forecast, 0.4% previous

Upcoming Potential Catalysts on the Forex Economic Calendar:

BOC monetary policy statement at 2:00 pm GMT
U.S. ISM manufacturing PMI at 2:00 pm GMT
U.S. JOLTS job openings at 2:00 pm GMT
FOMC member Williams’ speech at 3:30 pm GMT
FOMC member Bullard’s speech at 5:00 pm GMT
Fed Beige Book at 6:00 pm GMT
OPEC-JMMC meetings coming up

Use our new Currency Heat Map to quickly see a visual overview of the forex market’s price action! 🔥 🗺️

What to Watch: USD/CAD

USD/CAD 1-hour Forex Chart

USD/CAD 1-hour Forex Chart

Missing out on this neat USD/CAD downtrend?

We might just get a chance to hop in a pullback if volatility picks up during the BOC decision today!

The central bank is expected to hike interest rates by another 0.50%, bringing the benchmark rate up to 1.50%.

Failing to deliver an aggressive tightening move, however, might mean some downside for the Canadian currency since it would suggest that policymakers aren’t feeling so optimistic anymore.

In that case, USD/CAD could pop higher to the nearby resistance levels marked by a falling trend line and the Fibonacci retracement tool.

The 50% level looks like a prime spot for sellers to enter, as this lines up with the trend line, 200 SMA dynamic resistance, and a former support zone at the 1.2750 mark.

Technical indicators suggest that the downtrend is more likely to carry on than to reverse. The 100 SMA is below the 200 SMA to reflect the presence of selling pressure while Stochastic is nearing the overbought zone.

If you’re not comfortable trading around potential price spikes during a top-tier event, remember that there’s no shame in sitting this one out!