The USDCAD is trading up and down today, but remains below key MA levels to the topside. ON the daily chart, the pair is about 100 pips below the 100/200 day MAs near 1.3512.
Drilling in to the hourly chart, the pair is below the falling 100 hour MA at 1.3467.
It would take a move above the daily MAs and the falling 100 hour MA to tilt the technical bias back to the upside. It is the risk for the sellers looking for more downside momentum perhaps helped by a hawkish BOC tomorrow.
The Bank of Canada (BoC) will make their interest-rate decision at 10:00 EDT. The consensus among economists is that the rates will remain unchanged at 4.5%.
However, recent stronger-than-expected GDP (3.1% vs 2.4% est), CPI data (4.4% above the expected 4.1% YoY), and jobs figures (+41.4K vs 20 est), have raised speculation about a possible 25bps rate hike. The vast majority of economists still expect unchanged. However the markets are pricing in a 43% chance of a 25 basis points hike.
Governor Macklem and the Governing Council have hinted at the possibility of a rate hike in the near future, as per the minutes of the April meeting. Persistent inflation, resilient economic growth, and the risk of delaying action were the main factors supporting the case for a rate rise.
That hike risk, has traders leaning in the downward direction for the USDCAD (higher CAD) from a technical perspective.