The levels to watch over the BOC
The Bank of Canada and Stephen Poloz share their latest monetary policy decision with us today and while there's no expectation for any action, we're on dove/hawk rhetoric watch.
Adam's covered most of what to expect from the meeting in his preview, so I'll take a look at some of the price levels that may be in play.
USDCAD is being rather respectful of the tech levels in play at the moment.
USDCAD daily chart
The topside around 1.33 and the 38.2 fib is where we topped out and the 1.32 area is where the price has found itself putting a line in the sand whether above or below.
The 55 dma has been a good leaning spot for longs safe in the knowledge that it's backed up fairly closely by the 100 dma and support around 1.30.
If the BOC's message gives the CAD a lift then it's down at 1.30 that I'd expect any move to pull up. It would take some very hawkish words from Poloz to crack on through but don't rule out a quick move below on any initial headlines that the market jumps on. If any hawkish talk takes us through 1.2980 then we would be looking at a break.
If we get dovish noises from Poloz then 1.3140/50 and the 200 dma at 1.3175 is where that hot air may dissipate, and certainly 1.3200 will need something very strong if it's to break.
The trade isn't positioning ahead of the release but reacting after as the more probable likelihood is that we won't get anything really noteworthy to trade but if we do, at least we have some levels to watch.
I'll be watching the 1.30 area for a long, depending if and why we get there, more so than a short at 1.32, as I don't really want to be on the wrong side of the USD with the Fed noise to come.
The BOC decision is at 14.00 GMT with the presser 45 minutes later, so bear that in mind if you're going to trade it. It might be wise protecting any trades during that in between time.