USD/CAD remains within a familiar range with BoC in focus
|- The BoC is expected to hold considering the last six weeks of solid economic data.
- The price trades below the 200-day moving average and the resistance in the 1.33 handle.
USD/CAD has started out in early Asia between a low of 1.3314 and 1.3325 ahead of what is about to be a busy time for USD/CAD traders with the Bank of Canada around the corner. We received the stronger-than-expected Q2 increase in Gross Domestic Produce on Friday which might be a reason for the BoC to hold, however, the background detail within the report was less encouraging than the headline.
• GDP increased 3.7% (annualized) in Q2.
• Business investment declined, household spending growth was soft.
• Industry GDP details were better with solid growth in ‘non-commodity’ industries.
BoC expectations
The BoC is expected to hold considering the last six weeks of solid economic data, although the further escalations in US-China trade tensions have left some market participants looking for a rate cut. Markets are pricing in a full cut by December, with appreciable odds of a move in October - However, the BoC has been known to surprise.
"We expect the Bank to downplay recent economic strength in the face of worsening global trade tensions. Concerns over US-China relations should also be reflected in the forward looking language, where we expect subtle dovish tweaks," analysts at TD Securities explained.
USD/CAD levels
The price trades below the 200-day moving average and the resistance in the 1.33 handle and a confluence of the 23.6% Fibo where. If price resumes back to the 38.2% on a break of the 20/50-DMA, (1.3240/60), then bears will be targetting the 1.28 handle - 1.3350 is the near-term target to break still on the upside which guards the 1.34 handle and mid-June highs.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.