The USD/CAD has been under pressure once more, ahead of today’s BoC police meeting as well as of the release of the U.S. Retail Sales. The Bank of Canada will have its policy meeting today to revise its Benchmark Overnight rate. Currently, the main interest rate stands at 0.5% since July 2015 after the bank lowered it by a quarter basis points. No changes are expected to the current monetary policy, however, the press conference will be cautiously watched for comments regarding the rally of the commodity currencies that are apt to the oil prices.
The pair plunged more than 7% in February and March, it marked two consecutive losing months and is currently 1.49% lower than April’s opening level. It is worth to mentioning that in January the pair peaked at 1.4680 but failed to sustain its gains diving back near the psychological level of 1.2800. Going to the weekly chart, the pair closed only once positive for the last thirteen sessions.
The momentum indicators do remain oversold, so further correction may lie ahead which could potentially see a break above 1.2820 for a return to 1.2856 and then at the psychological level at 1.2900. Technically and according to the 1-hour chart, the pair is under correction. The lower time frames are still showing some bullish divergence so some caution is warranted on the upside.
If the aforementioned resistance levels do get taken out, there is then not too much to stop it heading towards the critical level at 1.3000, beyond which could then approach 1.3100, which coincides with the descending trend line.
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