USD/CAD hits one-month highs above 1.3670 and then retreats

Bank of Canada to announce monetary policy on Wednesday.
The Loonie is the worst G10 performer on Tuesday.
USD/CAD up for the fourth day in a row, heads for highest close in a month.

Matías Salord FXStreet

The USD/CAD rose further during the American session amid risk aversion and a decline in crude oil prices, ahead of the Bank of Canada decision. The pair climbed to 1.3670, hitting the highest level since November 4 and then pulled back toward 1.3620.

A weak Loonie boosts USD/CAD

As of writing, USD/CAD is hovering around 1.3645, about to post the fourth consecutive gain and the highest daily close in a month. The Canadian dollar is on Tuesday the worst performer among the G10 space.

The decline in crude oil prices (WTI down 1.80%, at fresh weekly lows) and in equity price weighs on the Canadian Dollar. The Dow Jones is falling by 0.53% and the Nasdaq drops by 1.58%. Crude and equity indexes are adding to yesterday’s losses.

On Wednesday, the Bank of Canada will announce its decision on monetary policy. A 50 basis points rate hike to 4.25% is expected. Some analysts see a smaller rate hike. Volatility around the decision is expected to increase significantly on CAD’s crosses.

“The BOC is unlikely to offer much to move the needle for CAD. CAD underperformance on crosses has occurred quickly and looks tactically stretched. A case for a reversal can be made, but we will look to fade that strategically given idiosyncratic drags”, said analysts at TD Securities.

Technical levels

USD/CAD

Overview
Today last price	1.366
Today Daily Change	0.0060
Today Daily Change %	0.44
Today daily open	1.36

Trends
Daily SMA20	1.3406
Daily SMA50	1.3571
Daily SMA100	1.33
Daily SMA200	1.3034

Levels
Previous Daily High	1.3605
Previous Daily Low	1.3385
Previous Weekly High	1.3646
Previous Weekly Low	1.3381
Previous Monthly High	1.3808
Previous Monthly Low	1.3226
Daily Fibonacci 38.2%	1.3521
Daily Fibonacci 61.8%	1.3469
Daily Pivot Point S1	1.3455
Daily Pivot Point S2	1.331
Daily Pivot Point S3	1.3235
Daily Pivot Point R1	1.3675
Daily Pivot Point R2	1.375
Daily Pivot Point R3	1.3895

Author

Matías Salord

FXStreet

Matías started in financial markets in 2008, after graduating in Economics. He was trained in chart analysis and then became an educator. He also studied Journalism. He started writing analyses for specialized websites before joining FXStreet.

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