Breaking News
Investing Pro 0
Ad-Free Version. Upgrade your experience. Save up to 40% More details

CAD Stands Firm Ahead Of BoC Meeting

By Matt SimpsonForexApr 18, 2018 08:48
CAD Stands Firm Ahead Of BoC Meeting
By Matt Simpson   |  Apr 18, 2018 08:48
Saved. See Saved Items.
This article has already been saved in your Saved Items

The Canadian dollar is the top performer this month ahead of today’s Bank of Canada meeting. And although no hike is expected today, CAD could either extend gains or find itself victim to profit-taking depending on the bank's policy statement or monetary policy report (MPR).

Technically, we want to pursue CAD long positions, but fundamentally, we’re a little wary that BoC may provide a slightly dovish meeting. We can see from the ‘statement highlights’ the bank aims to “remain cautious” with policy and, even though inflation is running slightly hot at 2.2%, fluctuations for inflation are being driven by temporary factors (namely gasoline, electricity and minimum wages).

An economic poll suggests the BoC will hike twice more this year and markets are currently pricing in July to be the first hike. But if we are to hear firmer clues within the MPR or statement that a hike could be approaching, it may help strengthen CAD after the meeting. And AUD/CAD could be especially targeted as a 25bps hike would put BoC’s rate on par with RBA’s at 1.75%.

Still, we’re not here to predict, so we’ll wait for key levels to break before committing to a trade. And with CAD being the strongest performer month to date, we’d look to capitalize on that strength if today’s meeting or Friday’s CPI read extends its run.


We’ve may have already seen the swing high with Friday’s bearish hammer. Monday’s bearish inside day and subsequent break lower strongly back this up, although yesterday’s hesitancy to close beneath last week’s low warrants a little caution. Therefore, we’d prefer to see a break beneath 0.9738 before assuming the bears are back in control.


Currently compressing near the highs, bullish momentum has remained a dominant theme since the 80.54 low, yet not expanded so fast it appears at risk of being over-extended. The bearish pinbar and its reluctance to trade above the 85.46 low calls for some caution, so we’d step aside until a break of 85.75 occurs as this clears both of its near-term hurdles. Of course, if we see resistance hold and bearish momentum take hold, it's back onto the backburner for now.


For a broader analysis you can view our USD/CAD post from Monday. We can see that resistance held and allowed bearish momentum to return but, yesterday’s bullish hammer closed above 1.2543 to warn of a potential ‘fakeout’. So, we’d want to see a break of 1.2526 to assume a resumption of the downtrend and eventual run towards the 1.2450 low.


Due to its impressive run from the March low, it would be rude not to mention this cross. The daily trend structure is firmly bullish with minor pullbacks, and recent compression candles respected support prior to yesterday’s range expansion session. Yet as RSI is overbought and yesterday’s high is far beyond the upper Keltner band, we’d prefer to wait for another retracement or period of tight consolidation before entering. Who knows, if today’s meeting is a lame duck and the swiss franc can cease its broad descent, perhaps we’ll be treated to such an outcome.

CAD Stands Firm Ahead Of BoC Meeting

Related Articles

Kenny Fisher
CAD Rattled By FOMC, Risk Aversion By Kenny Fisher - Aug 19, 2021

The Canadian dollar is sharply lower on Thursday, as the currency has fallen to a four-week low. Currently, USD/CAD is trading at 1.2809, up 1.18% on the day. FOMC Signals Taper Is...

Blake Morrow
Chart Of The Day: CAD/JPY By Blake Morrow - Apr 07, 2021

CAD/JPY posted a false breakout last week above the 88.00 level. At that time, the divergent and overbought RSI suggested the pair would pullback. As we drop back towards the 61.8%...

CAD Stands Firm Ahead Of BoC Meeting

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind: 

  • Enrich the conversation
  • Stay focused and on track. Only post material that’s relevant to the topic being discussed.
  • Be respectful. Even negative opinions can be framed positively and diplomatically.
  •  Use standard writing style. Include punctuation and upper and lower cases.
  • NOTE: Spam and/or promotional messages and links within a comment will be removed
  • Avoid profanity, slander or personal attacks directed at an author or another user.
  • Don’t Monopolize the Conversation. We appreciate passion and conviction, but we also believe strongly in giving everyone a chance to air their thoughts. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at’s discretion.

Write your thoughts here
Are you sure you want to delete this chart?
Post also to:
Replace the attached chart with a new chart ?
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
Are you sure you want to delete this chart?
Replace the attached chart with a new chart ?
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Continue with Google
Sign up with Email