Bank of Canada - Last Man Standing
Joe Perry August 20, 2019 9:42 PM
The Bank of Canada is one of the only, if not THE ONLY, major Central Bank that has not come out and said they may cut rates. The last time the BOC moved on rates was on October 24th, 2018. You may recall that it was just a year ago when some Central Banks were still raising rates. And the BOC was no exception, raising rates from 1.50% to 1.75%.
Tomorrow Canada releases July CPI (YoY), expecting 1.7%. Canada also releases Existing Home Sales for July (expecting 5.38M), and on Friday Core Retail Sales will be released for June (MoM) expecting -0.1%. We may see the BoC jump on the bandwagon and turn more dovish at its next meeting on Sept 4th if the data comes out worse than expected.
USD/CAD is currently banging up against previous support and the 61.8% retracement from the high on May 31st to the low July 12th near 1.3350.
Source: Tradingview, FOREX.com
However, as we saw with USD/MEX on a shorter timeframe, USD/CAD is putting in higher lows and has hit this resistance level multiple times. It appears the market may be trying to get ahead of the BOC and weaken the CAD ahead of the data.
Source: Tradingview, FOREX.com
If upcoming data from Canada comes out worse than expected, USD/CAD may push higher through resistance towards the May highs near 1.3665. Support comes in around the upward sloping trendline, near 1.3250. And if the upcoming data is worse, watch for the BOC to take a move dovish stance at its next meeting.
Disclaimer: The information on this web site is not targeted at the general public of any particular country. It is not intended for distribution to residents in any country where such distribution or use would contravene any local law or regulatory requirement. The information and opinions in this report are for general information use only and are not intended as an offer or solicitation with respect to the purchase or sale of any currency or CFD contract. All opinions and information contained in this report are subject to change without notice. This report has been prepared without regard to the specific investment objectives, financial situation and needs of any particular recipient. Any references to historical price movements or levels is informational based on our analysis and we do not represent or warranty that any such movements or levels are likely to reoccur in the future. While the information contained herein was obtained from sources believed to be reliable, author does not guarantee its accuracy or completeness, nor does author assume any liability for any direct, indirect or consequential loss that may result from the reliance by any person upon any such information or opinions.
Futures, Options on Futures, Foreign Exchange and other leveraged products involves significant risk of loss and is not suitable for all investors. Losses can exceed your deposits. Increasing leverage increases risk. Spot Gold and Silver contracts are not subject to regulation under the U.S. Commodity Exchange Act. Contracts for Difference (CFDs) are not available for US residents. Before deciding to trade forex and commodity futures, you should carefully consider your financial objectives, level of experience and risk appetite. Any opinions, news, research, analyses, prices or other information contained herein is intended as general information about the subject matter covered and is provided with the understanding that we do not provide any investment, legal, or tax advice. You should consult with appropriate counsel or other advisors on all investment, legal, or tax matters. References to Forex.com or GAIN Capital refer to GAIN Capital Holdings Inc. and its subsidiaries. Please read Characteristics and Risks of Standardized Options.