USD/CAD Braces Itself For Volatility Ahead Of Powell and BoC [Video]
|With Fed minutes, Powell's testimony and a BoC meeting, it should make for a lively session for traders, with USD/CAD finding itself caught in the crossfire.
Starting with volatility (lower panel) we can see that 1-week historical volatility has dropped as markets await this key date. However, implied 1-week volatility has also risen to show markets do not expect volatility to remain low. Given there are so many moving parts over the next 12 hours between the Fed and BOC, it would be advisable to step aside until a clearer picture emerges from the occasion. Yet what we're looking for is a clear diversion between the Fed and BOC, which could allow us to expect a sustained bullish or bearish move.
However, whilst we retain our core, bearish view on the daily charts, USD/CAD sits at a pivotal level ahead of Powell's testimony and BoC's meeting.
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