USDCAD in focus into the Fed and BoC Meetings

Intermediate
  • The US Dollar has moved even more into the trading spotlight over the past 24 hours as markets eye the Fed Meeting today (Wednesday 30th October).
  • Markets are anticipating a rate cut, the third in this mid-cycle adjustment, but also with possibility of a slightly less dovish tone (de facto more hawkish), with expectations growing that this will be the final cut.
  • This has seen some upside pressures on the US Dollar across currencies in the past week for latter October.
  • In addition, ahead of the Fed we also get the Bank of Canada interest rate decision today, where no change in rates is expected.
  • Although the Canadian Dollar has been strengthening against the US Dollar through much of October and has an intermediate-term bearish theme, the rebound over the past 24 hours has highlighted potential upside risks for USDCAD into and through the Central Bank Meetings.

USDCAD: Risks flip higher into TWO Central Bank decisions 

A Tuesday rally above 1.3075 from just above 1.3036 support (from 1.3037) to reject immediate bear forces from last week’s bear extension, to switch risks to the upside Wednesday.

The early September plunge after the Bank of Canada interest rate decision below 1.3221 shifted the intermediate-term outlook to bearish.

For Today:

  • We see an upside bias for 1.3100; break here aims for 1.3123 and 1.3146, maybe 1.3182.
  • But below 1.3071 opens risk down to 1.3037/36 and 1.3010/00 and maybe towards 1.2966.

 Intermediate-term Outlook – Downside Risks: We see a downside risk for 1.3010/00.

  • Lower targets would be 1.2795 and 1.2527.
  • What Changes This? Above 1.3383 shifts the intermediate-term outlook straight to an intermediate-term bull theme.
4 Hour USDCAD Chart 2019-10-30

Editor in chief

Steve Miley has 29 years of financial market experience and as a seasoned expert now has many responsibilities. He is the founder, Director and Primary Analyst at The Market Chartist, the Editor-in...continued

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