The 100 and 200 hour MAs stall the fall
The USDCAD has been moving lower on the back with help from "risk on" flows. The AUD and NZD are also stonger along with the loonie.
Technically, the pair did move down to MA support defined by the 100 and 200 hour MAs at 1.28356 and 1.28172 respectively. The 38.2% of the move down from the May high to the May low at 1.2828. The low reached 1.2829 near all the levels (see chart above).
There has been a little bounce.
Remember, although stronger today, the market on Friday took out some of the expectations for a May hike after the retail sales and CPI data. The data was thought disappointing and as a result, the probability of a hike moved from about 43% to 23% intraday. Currently, the expectations are for a 26.1% chance. The decision will be on May 30th.
As the time gets closer, the market traders will jockey for position. Even at 26%,, there is still some chance. Be aware that NAFTA news may play a more important role in the decision too. If there can be a break through that may raise the prospects back toward the 50-50 level. Absent that news, the BOC will likely be less inclined to hike.
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