...Risk is if they surprise with near 90% hike priced in
Will the BOC go against the market and not hike, preferring to wait for NAFTA? That is the wild card as the IOS market has pretty much priced in a hike at 10 AM ET/1500 GMT.
If they don't hike, the initial reaction will be a run higher in the USDCAD. Shorts will be scrambling, stops will be triggered and spreads will go wide at your broker. Trading conditions are not the best in those trading conditions. Risk is high.
On a no change, the trading will be focuses on "What next?" both technically and fundamentally. Will the BOC be dovish in their hike? Will they be more hawkish after the surge in employment seen recently? Rates are still low and stimulative.
Technically, the questions for me are:
Can the price get and stay below 1.2400 on the downside (see the hourly chart and the red circled numbers), and then the 61.8% of the move up from the September low at 1.23893 from the daily chart.
Those are the bearish targets that need to be broken (and remain broken) on a move lower.
For the bullish view (i.e. buy the fact price action), the question for me would be:
Can the price get and stay above the 200 and 100 hour MAs at 1.24596-1.24646 area? Above that, the 1.2470 is the 38.2% of the move down from last week's high (see yellow area in the hourly chart below). A move - and staying above that area - would be more bullish and should see further upside potential.
