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USD/CAD Daily Forecast – 1.3345 on Target Ahead of BoC Rate Decision

Nikhil Khandelwal

After making a decisive move from 1.3330 level to 1.3383 level in the last North American session, the pair seemed to slow down today. During the Asian trading session, the USD/CAD pair was traveling along a straight line, staying glued to the 1.3327 level.

Significant Economic Events

Traders stay in anticipation over the Bank of Canada (BoC) interest rate decision. Notably, the central bank had lowered the rates twice in this year to cope with the rising economic sluggishness. Anyhow, this time, the market expects the BoC to keep the interest rates unchanged at 1.75%.

For Canada, the Inflation, Retail Sales, and GDP data had displayed some pleasing figures, this time. Hence, the BoC Governor Poloz might prefer to save the firepower for the upcoming quarters.

The policymakers at BoC might also look for the Fed’s actions in this regard that acts as a major lead for other central banks. However, recently, Reserve Bank of Australia (RBA) and Bank of Japan (BoJ) had already decided to hold rates this time, awaiting Fed’s call.

Meantime, US and Canadian Trade data release event might also catch market attention in the middle of the day. Noticeably, the Street analysts expect the US July Trade Balance to report $-53.5 billion vs. previous $-55.2 billion. On the other hand, the consensus estimates the Canadian July International Merchandise Trade to record $-0.40 billion vs. prior $0.14 billion.

At around 20:30 GMT, the API Crude Stock Change computed since August 30 might attempt to tweak the daily oil price actions. This Crude data had reported -11.1 million, last time.

Technical Analysis

1-Day Chart

On the daily chart, the Loonie pair appeared to linger above the Green Ichimoku Clouds. Meantime, the underlying base line and the conversion line of the Ichimoku Clouds were providing additional bull strength. Also, the USD/CAD was moving well above the Parabolic SAR technical indicator, developing further positive prospects.

USDCAD 1 Day 04 September 2019

However, the sturdy 1.3345 resistance handle was acting as the critical upside barrier since August 7. Ability to breach above the aforementioned resistance would immediately please the buyers. In such a triumphant upward march, the pair bulls would target the resistances stalled near 1.3423 and 1.3545 levels.

3-Hour Chart

On the 180-Min chart, the pair seemed to display an outbreak of the 1.3200/1.3350 range-bound at the start of September.

USDCAD 180 Min 04 September 2019

Nevertheless, the bulls were struggling to take control over the pair’s daily price actions. Also, while remaining between the 2:1 and 3:1 Gann lines, the overall short-term trend appeared more bearish. Notably, the Stochastic Oscillator signals were heading south side, revealing a lack of momentum in the pair bulls.

This article was originally posted on FX Empire

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