Canadian dollar traders are preparing for a busy final session to the trading day today as the Bank of Canada is due to release its latest rate call with the market fully expecting to see a second consecutive 25 basis point cut from the central bank. Data has been pulling back hard in Canada and last week’s CPI number probably locked in today’s rate cut as it came in nicely below expectations on both the month-on-month and year-on-year print. Retail Sales numbers on Friday confirmed the slowing economy with the Core number coming it at -1.3% against an expect 0.5% decrease.
The Cad has depreciated hard against the greenback over the last couple of weeks with the dollar gaining around 1.3% against its northern neighbour and it is now sitting near significant resistance levels on both the Hourly and Daily charts which should provide good trading opportunities on the announcement, statement, and subsequent press conference. Resistance is now sitting just under 1.3820 with further resistance at the yearly high just 25 pips higher. Support comes in initially around 1.3700, however unless there is a much more hawkish than expected turn from the bank then expect the current trend to provide good buying opportunities on any dip.
Resistance 2 : 1.3846 – 2024 High
Resistance 1 : 1.3817 – Long-term Trendline Resistance
Support 1 : 1.3698 – 200-Day Moving Average
Support 2 : 1.3615 – Long-term Trendline Support
