USD/CAD recovers to 1.3100 ahead of BOC rate hike
- Fresh selling in Oil, US dollar strength lend support to USD/CAD.
- Upside could remain capped amid expectations of a BOC rate hike.
The USD/CAD pair caught a fresh bid-wave and embarked upon a steady recovery mode to regain the 1.31 handle before meeting fresh supply at the last, as the bulls await the BOC monetary policy decision for the next push higher.
The latest leg higher in the spot can be attributed to resurgent US dollar demand, mainly driven by a sell-off in the EUR and the GBP, in the wake of the European political woes. Moreover, markets prefer to hold the safe-haven US dollar in times of softer risk sentiment.
Furthermore, the ongoing weakness seen around oil prices amid Saudi’s commitment to compensate Iran’s oil supply shortfall keeps the resource-linked Loonie on the back foot. However, the recovery in the spot could be short-lived, as the CAD may regain strength on a 25bps rate hike announcement due by the BOC later in the NA session today.
USD/CAD Technical levels
FXStreet’s Analyst Omkar Godbole offers key technical levels for the USD/CAD pair heading into the BOC rate decision.
R1: 1.3100 (session high)
R2: 1.3120 (falling trendline)
R3: 1.3226 (September high)
Support
S1: 1.3048 (10-day EMA)
S2: 1.3005 (100-day EMA) - 1.30 (psychological support)
S3: 1.2954 (200-day EMA)
Author
Dhwani Mehta
FXStreet
Residing in Mumbai (India), Dhwani is a Senior Analyst and Manager of the Asian session at FXStreet. She has over 10 years of experience in analyzing and covering the global financial markets, with specialization in Forex and commodities markets.
