The Canadian Dollar (CAD) has remained under pressure this week ahead of the Bank of Canada (BoC) interest rate announcement today. There is a small chance that the BoC will hike today however it is widely expected to hold interest rates at 1.25% as inflation has moved closer to the 2% target and economic growth has been steady. Moreover, there is still some uncertainty related to US trade policy as the NAFTA revamp continues to face delays. The Canadian Dollar has been weak against the US Dollar as the Federal Reserve is expected to raise rates next month. Traders should be alert to increased volatility for CAD pairs around the interest rate decision.
In the daily timeframe, USDCAD has broken out above 1.3000 and while the pair remains above this level, a continuation to the highs at 1.3124 is possible with immediate resistance at 1.3048. A reversal below 1.2990 will find support at 23.6% retracement at 1.2920 and then 1.2800.
On the daily chart, GBPCAD is testing support at 1.7240 and a break of this level could see continued downside towards the 50% retracement of the August 2017 lows at 1.7120 followed by 1.6820. On the flip-side, a bullish reversal will find resistance at 1.7360 and then 1.7430 at the ascending trend line.