USD/CAD reverses a dip to 1.3080, focus on BOC decision

US dollar slips in tandem with USD/JPY, drags USD/CAD lower.
Fresh selling in Oil caps the downside, as the focus shifts to the BOC rate hike plans.

Dhwani Mehta FXStreet

The USD/CAD pair quickly reversed a brief dip to daily lows near 1.3080 region, now looking to take on the recovery above the 1.31 handle. However, it remains to be seen if the spot can sustain the bounce amid persisting risk-off market environment.

Risk-off remains at full steam in Europe amid ongoing uncertainty over the Italian budget, Brexit deal and the US-Saudi tensions that knocked-off the USD/JPY pair. As a result, the US dollar slipped from two-week tops versus its main peers, dragging the USD/CAD pair lower.

Further, a 3 percent slump in the Turkish Lira vs. the greenback adds to the offered tone around the spot. However, the losses appear capped amid the renewed weakness seen around oil prices while expectations of a 25bps rate hike to be announced by the Bank of Canada (BOC) tomorrow also keeps the Loonie somewhat underpinned.

In the meantime, the broader market sentiment and US dollar dynamics will continue to drive the USD/CAD price-action ahead of the Wall Street open and Fedspeaks.

USD/CAD Technical levels

According to RoboForex Team, “USDCAD is trading at 1.3100; the instrument is moving above Ichimoku Cloud, thus indicating an ascending tendency. The markets could indicate that the price may test Tenkan-Sen and Kijun-Sen at 1.3055 and then continue moving upwards to reach 1.3185. Another signal to confirm further ascending movement is the price’s rebounding from the support level. However, the scenario that implies further growth may be cancelled if the price breaks the downside border of the cloud and fixes below 1.2965. In this case, the pair may continue falling towards 1.2855.”

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.

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