USD/CAD Analysis Ahead of Bank of Canada Rate Decision
Analysis of the USD/CAD pair ahead of the Bank of Canada rate decision
Before the Bank of Canada’s interest rate decision later in the day, the USD/CAD pair is moving. At 5.7%, inflation is at its highest level in 30 years, and unemployment is at its highest level ever, so the central bank is likely to raise interest rates by 50 basis points or even 75 basis points. A rise of 25 basis points might not be what people want to see. The Bank of Canada should also say that it will tighten its monetary policy.
As worries about the chances of a diplomatic end to the war in Ukraine fade, the Canadian dollar gets a boost from oil prices going up above $100.
The US dollar stays strong, though, because of the possibility of a tough Fed. The market is now pricing in an 87 percent chance that the rate will go up by 50 basis points at the meeting in May. The US PPI data will be out later.
What’s next for the USD/CAD pair?
The USD/CAD pair has been getting better since 1.24. The rise above the 200-day moving average, the bullish MACD, and the fact that yesterday’s drop was bought off keep the bulls optimistic about more gains.
Buyers will look for a rise above the 50-day moving average, which is currently at 1.2650, to speed up toward 1.27 and 1.2730, which has been both a support and a resistance level several times in the past few months. last months.
Bears will look for a break below the 200-day moving average and uptrendline support at 1.2625 to bring yesterday’s low at 1.2580 and the psychological level at 1.2500 into play.