- DXY depressed in Asia
- WTI remains on the front foot.
- A quiet NA session ahead.
USD/CAD: Eyes on BOC verdict.
The spot remains suppressed and looks to test the 1.24 handle amid persistent weakness seen in around the US dollar across its major peers, as markets now believe that the Fed isn’t the only central bank to go for higher interest rates this year. The USD index drops -0.10% to 90.53, recovering slightly from three-year lows of 90.39.
On the CAD-side of the story, the prolonged rally in oil prices continues to keep the sentiment buoyed around the resource-linked Loonie, adding to the weight on the CAD pair. Meanwhile, better Canadian fundamentals back the case for a rate hike, when the Bank of Canada (BOC) meets to decide on its monetary policy this Wednesday.
“We expect the BoC to raise the overnight rate by 25bp at Wednesday's meeting. Clear signs of diminished labor market slack and an economy operating at full capacity should outweigh rising trade tensions with the US. Risks around a possible US withdrawal from NAFTA will likely once again be the biggest concern weighing on the BoC, but absent an imminent withdrawal notice, they should feel comfortable bumping up the overnight rate to its post-crisis high of 1.25%,” the RBC Capital Markets Research Team noted.
In the meantime, the USD price-action and broader market sentiment will play the main drivers amid holiday-thinned light trading ahead.
USD/CAD Technical View
The immediate support for the pair aligns at 1.2437 (daily low) ahead of 1.2400 (natural support) and 1.2377 (Jan 8 low). On the upside, resistances could be seen at 1.2469 (daily top), 1.2487 (5-DMA) and 1.2500 (round figure).
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. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.