USDCAD traders are preparing for another busy day on Wednesday as focus moves away from geopolitical updates and a volatile Oil market to fundamentals as the Bank of Canada announces its latest interest rate call. The market is pricing in a strong 94% chance that the bank will hold rates at 2.25%, however traders are anticipating plenty of volatility in the currency from the message that we receive from Tiff Macklem and his team on the next move for rates in the statement and subsequent press conference. The expectation for more volatility on this update has increased over the last few days as more uncertainty has crept into the market with the increased hostilities in the Middle East between the US and Iran.
USDCAD is currently sitting on a strong support line, having moved lover over the last few sessions on the back of surging Oil prices. Anything more hawkish from the bank, in line with more inflationary concerns with regard to geopolitical updates could see the Cad appreciate further and see USDCAD break strongly south through the 1.4100 level, whilst anything leaning on the dovish side of things should see the pair push back higher into more familiar higher ranges from the last couple of weeks, with initial resistance now sitting around the 1.4230 level. The likelihood is that in the short term, Oil moves will have more impact in the market, however for longer term moves, this updates from the bank will be crucial.
Resistance 2: 1.4248 – 202 High
Resistance 1: 1.4228 – Trendline Resistance
Support 1: 1.4115 – July Low and Trendline Support
Support 2: 1.4032- Long Term Trendline Support
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