The Bank of Canada rate decision could push the USD/CAD decisively into a new trading range. Economists at Scotiabank highlight the key breakout points for the pair.
“A 25 bps hike and balanced statement should give the CAD a modest lift – considering that swaps have been (and remain) reluctant to fully price in this tightening; USD/CAD could test the upper 1.32s/low 1.33 zone. A more dovish outcome – no hike – will see spot move quickly higher to test the recent peaks around 1.3500/20 at least.”
“Technically, the short-term charts highlight key break-out points for USD/CAD in the short run – above 1.3415, which will prompt a retest of the 1.35 area (last week’s high) or below 1.3325 which should prompt USD losses to the 1.3275 area.”
See – BoC Preview: Forecasts from eight major banks, edging towards a final rate hike
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