The Bank of Canada will make an interest rate announcement at 9 AM ET. The expectation is for no change.
The movement out of risk today has the USDCAD moving back higher (oil prices are also down). The price high today bumped against bull flag high at the 1.0422 level. A move above this level would be the first key clue on the topside. Other levels to eye on the topside include:
- The 6+ month high from yesterday at 1.0444.
- 1.0497 – 1.618 extension of the corrective move down this week
- 1.05216 – high from November 2011
- 1.0558 topside trend line off recent highs
- 1.0656 – high from October 2011
If the price reverses and moves lower on the announcement, I will be using the following levels for bearish bias clues.
- A move below the 1.0374 would take the price below the 38.2% of the move up from the May 31 low
- A cluster of support at a.0353-57 where 2 trend lines (bull flag and upward line from the May 30th low), 50% retracement and 100 hour MA are all found. A break below this level should be significant and should lead to a momentum move lower.
- 200 hour MA at the 1.03027. The price had two bars close below this MA since May 3rd. This line should be a signficant support level for the pair.
