In USDCAD news, the Bank of Canada has held rates steady at 1.75%, but the USDCAD spiked after the BoC provided a less-than-hawkish tone than the market expected to is quarterly monetary policy report.
The USDCAD charts show that the pair is trading at 1.31362, representing a 100-pip surge on the day after the BoC noted in its monetary policy report that it expected inflation to stay within the 5-year projected band that it had set at its target.
The markets interpreted this as a less than hawkish tone and put the USDCAD on bid. The BoC Governor Stephen S. Poloz and a Senior Deputy Governor Carolyn A. Wilkins will be sharing their thoughts on the monetary policy outlook at the BoC press conference slated for 16:15 GMT.
The USDCAD analysis presented below shows that the price levels identified on the USDCAD charts will be the guiding lights for future price forecasts. Presently, the USDCAD is approaching the resistance level seen at the 1.31501 price level; site of the previous cluster of lows of September 2019 which are expected to serve in role reversal as resistance points.
A break of 1.31501 opens the door for the USDCAD to approach new targets at 1.32030 and 1.32254. The highs of 17-24 September 2019 present a further upside target at 1.32974, with the August and October 2019 highs at 1.33487 expected to complete the near-term upside targets.
On the flip side, failure of the pair to breach the immediate resistance at 1.31501 could lead to a pullback towards the immediate support at 1.30632, with potential for further downside to 1.29953 if further strengthening of the Canadian Dollar is seen.
Further volatility is expected on this pair when the BoC Governor delivers his remarks in the press conference coming up at 1615 hours GMT.