USD/CAD is trading in the red today ahead of the BOC policy meeting. You should be careful because the BOC Rate Statement and the decision on the Overnight Target rate will shake the currency pair. The price is trading at 1.3360, above the broken 1.3344 major static resistance.
Technically, USD/CAD should climb higher in the upcoming period, but it remains to see how it will react after the BOC decision. As you already know from the economic calendar, the Bank of Canada is expected to cut the Overnight Rate by 50 basis points later today to combat the coronavirus impact.
Normally, a rate cut could send USD/CAD higher in the wake of the policy meeting. We'll see what the BOC will bring on the table today, a bigger cut will definitely push the pair way higher, while a less than expected cut could attract the sellers again.
USD/CAD has finally managed to break out above the 1.3344 major static resistance. The pair is now pressuring this obstacle and it should resume the upside movement if it consolidates above it and above the median line (ML) of the ascending pitchfork.
Technically, a reversal and an important upward movement was somehow expected after the failure to stabilize below the 1.3034 support. It has also failed to approach the median line (ml) of the major descending pitchfork, USD/CAD it has moved away from this dynamic support and it has continued to pressure the upper median line (uml).
The valid breakout above the upper median line (uml) has signaled a potential breakout above 1.3344 as well as a further increase. USD/CAD moved sideways between 1.3344 and 1.3034. Later, it managed to escape from this extended sideways movement, the false breakdown from this range signaled an upside valid breakout and a significant bullish movement.
- TRADING TIPS
We may have a good long opportunity if the price stabilizes above 1.3344 and above the median line (ml) of the minor ascending pitchfork, the price could be attracted by the upper median line (UML) of the minor ascending pitchfork.
However, the next major upside target is seen at the 1.3664 high, USD/CAD could approach and reach this level if it stays above the median line (ML). A potential drop could appear if the pair fails to stabilize above the 1.3344 and above the median line (ml), the downside targets are seen at the sliding line (SL), lower median line (LML) and at the upper median line (uml).
