Yo, so the Bank of Canada just popped the interest rates down by 25 basis points, going from 2.75% to 2.50% in September. They didn’t spill much tea on what's next, keeping us on our toes. 🕺

This wasn't shocking or anything, but they did drop a vibe that more rate cuts could be on the horizon. 👀

Let’s dig into which setups from our watchlist totally vibed with BOC’s emo phase and see what thrived during this wild central bank week. 🌍📈

Watchlists are like your textbook for price vibes & strategy deets, supported by both fundamental & technical tea, a crucial step towards creating a lit discretionary trade idea before crafting a risk & trade gameplan.

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The Setup

• What We Were Watching: BOC Monetary Policy Statement for September 2025
• The Expectation: BOC to trim rates by 0.25% to 2.50%
• Data outcome: BOC dropped borrowing costs by 25 basis points, and Governor Tiff Macklem hinted this isn’t the finale in rate cuts
• Market vibes surrounding the event: All eyes on the FOMC decision up next with some caution in the mix, peeps cashing out on short USD positions and easing off risk plays

Event Outcome

BOC did the expected rate cut thing but didn’t overexplain, leaving the door wide open for more cuts, perhaps in December. Risks like sketchy job scene and tariffs got a mention, with price pressures losing steam.

Key Tea Spills:

• Rate drop delivered as expected: 25bp dip has the overnight rate at 2.50%, bank rate at 2.75%, and deposit rate at 2.45%
• Job scene sinking fast: Employment went downhill for two months, unemployment hit 7.1% in August
• GDP took a nosedive: Second quarter GDP slid 1.6%, tariffs got exports down 27%
• Inflation taking a chill pill: Core inflation parked at around 3%, monthly vibes cooled; headline CPI at 1.9%
• Trade chaos spreading: Beyond tariffs on steel and aluminum, auto, copper, softwood lumber, and agricultural goods caught the vibe
• Biz investments on pause: Companies holding off spending ’cause of policy uncertainty

At the presser, Macklem said uncertainty is still lit and that the central bank would continue analyzing those tariff vibes and their impact on the economy and inflation.

Fundamental Mood Activated: Bearish CAD setups

Market & Exogenous Motivators:

The week’s trading scene was a mixed bag, with pre-FOMC moves and risk vibes driving market euphoria before the risk vibes did a remix after the Fed event.

Early Week: All About That Stimulus

Word on the street that China and the U.S. got a TikTok deal outline over the weekend hyped up the risk-taking, but everyone was really glued to FOMC and its potential dovish drop, with peeps prepping for a 0.50% rate cut splash.

Weak data outta China also stirred more stimulus hopes, with the government ready to roll out action to boost the services scene and lure foreign investments. 📊💸

Mid-Week: FOMC Jitters and Wobbles

Folks started hedging their FOMC bets leading to the action, seeing a shallow dollar pick-up and gold taking a step back from its high shine.

As expected, the Fed dropped a 0.25% cut while predictions showed more cuts for 2025. However, when Powell played down job market risks and showed brighter economic flashcards, the dollar rebounded from its drop.

After the FOMC showed its hand, assets went into freestyle mode, guided by their own beats. Bitcoin found a boost with SEC’s nod for generic crypto ETF listings while U.S. stocks soared with Nvidia backing Intel; crude oil circling back to geo-drama, with Treasury bonds riding the positive mid-tier U.S. data train.

Friday:

Markets danced to a funky beat with off-the-chart correlations, gold, bonds, dollars, and stocks all grooving upward despite their usual opposite vibes. Fed’s mixed signals only added to the confusion, as investors juggled dovish hopes with solid economic signals. The mix inspired a safe haven hop, picking treasuries, and U.S. assets while speculative parts like Bitcoin took a dip.

Scenario Scorecard: How Did They Roll?

CAD/JPY: Quite a Bear Mood CAD Event + Risk-off Mood = Arguably decent chances of good vibes

CAD/JPY 1-hour Forex Chart by TradingView

This yen character was chilling under the short-term trend line backup before the dovish flock vibe showed up, hitting the BOC statement low point mid-week (106.67).

The announcement dipped CAD/JPY but anxieties about FOMC were buzzing, causing a spiral to S1 (106.00) as CAD lagged behind the U.S. dollar drop. It boomeranged during Powell’s not-so-chill presser, having a venue to test the shattered trend.

CAD/JPY strutted through the rest of the week, hitting more of a general "risk-on" vibe, skipping over the tumbleweed of oil prices. The “buy-the-rumor, sell-the-news” wave management was probably working here, given how down the CAD scene was ahead of the BOC call.

The resistance eventually appeared in the R1 resistance hood. A bit of a bear move hit us here, connecting with a surprising hawkish wave coming out of BOJ’s sesh (they’re unwinding a ¥75 trillion ETF stockpile, with a couple of dissenters backing rate hikes). For CAD/JPY bulls, it was like finding a golden opportunity with JPY bulls losing momentum as the BOJ’s slow timing of unloading its assets was reckoned in. 🚀

Stay-Lit Watchlist – Bullish CAD Setups and EUR/CAD Long Setup

EUR/CAD: Net Bearish CAD Event + Risky-On Mood

EUR/CAD 1-hour Forex Chart by TradingView

This one went ham, rolling past the targe range shorty after its virtual debut, propped by eurozone data like Germany’s ZEW economic sentiment and ECB’s happy mood, giving euro a nudge. 💥

Optimistic European equities, likely caught in a risk-flow loop anticipating a chill FOMC vibe, kept euro’s shield up from the Loonie.

EUR/CAD busted through R1 Pivot resistance, chin up to R2 before retreating, chilling in a range awaiting BOC’s speech, having played out the FOMC vibe shift.

The FOMC vibe triggered a rally to R2 (1.6320), yet it fizzled as CAD got a boost from dollar coolness, and a “buy-the-hype, sell-the-news” CAD rally was brewing.

EUR/CAD moved downward for the rest of the week, despite oil’s mood swing and euro’s strong game this week, finally chilling at the bottom where our watch was at BOC’s call time.

CAD/CHF: Fairly CAD-Loving Scene + Risk-Friendly Vibe

CAD/CHF 1-hour Forex Chart by TradingView

We mentioned possibility grilling a CAD/CHF breakout if BOC delivers that “hawkish cut” or chills future easing vibes. But, nah, didn’t play out as we called.

The pair dipped out of the consolidation space post our forecast discussion, making the setup appealing if we see some favorable vibe developments.

This Watchlist crashed post-event vibes-wise, in our take, but CAD/CHF zoomed post-BOE event as “buy the-hype, sell-the-news” flex overpowered other week vibes. Chill vibes prevailed when the Fed didn't push for a more aggressive future rate cut outlook. 🌟

NZD/CAD: CAD In-A-Good Mood Scene + Risk-Off Mood 

NZD/CAD 1-hour Forex Chart by TradingView

The BOC call pretty much axed CAD bullish setups like the NZD/CAD short at a range top, but NZD/CAD smashed lower powered by fresh CAD bear vibes and NZD taking Ls all week, bossing its slide.

The Kiwi’s rough week, prolly driven by weak Kiwi data load-ups, especially the bummer Q2 GDP show on economy shrinkage, played a heavy hand in the buzz.

Looking back, this pair had mad potential due to faulty Kiwi vibes, pairing perfectly with traders' CAD reactions post-BOC call. 👟💼

The Verdict

The BOC kept the window open on rate cuts down the line with their laidback statement highlighting play-by-play risks, marking labor and tariff hurdles.

And with markets sliding into a risk-off sentiment right before the BOC, CAD/JPY was a reliable squad player this week within our watchlist scenes. The pair was into bearish mood waves even pre-call, leaving shots lined up should BOC bring shades.

However, the CAD “buy-the-hype, sell-the-news” phenomenon rolled intensely, given no strong future cut signals from BOC spilled. Looking back, rebounds aren’t the shocker, since CAD’s September story involved an uptrend shake against majors till mid-September, right till the BOC set the record.

Post-FOMC dynamics and the whirlwind central bank week = more complex vibe factors stirring markets, though oil prices possibly suggested CAD short clear-outs, likely profiting from short stans.

All in all, we deem this scheme as “nah fam” since potential positive outcomes from a CAD/JPY short position last week would’ve needed mega-active trade maneuvers to hold net positives, only slightly possible post bounce and flips at the crucial R1 Pivot resistance territory. Basically, it was a passing moment.

Main Replay Points: