Bank of Canada Tonight: USD/CAD Retest

May 25, 2016

Image: Flikr (cc)

Bank of Canada Tonight: USD/CAD Retest:
The Victoria Day long weekend has come and gone for traders of the Canadian Dollar and we’re back full steam ahead for tonight’s Bank of Canada rate decision.

Bank of Canada Rate Decision Preview

USD/CAD has rallied hard into tonight’s BoC meeting, but has paused at the previous bullish trend line that price is currently re-testing.

USD/CAD Weekly:
160525_usdcad_weekly
Click on chart to see a larger view.

With the most previous inflation number beating expectations, the BoC actually has a bit to be positive about heading into the release.

They aren’t expected to cut rates, but any change in tone could see volatility across the various CAD pairs. Will the bank remain optimistic as the price of oil continues to rebound, or will the production lost during the most recent wildfires that swept through Alberta weigh on the country’s bottom line and therefore the bank’s position?

With the amount of uncertainty heading into the release, it’s no surprise that we technically find price sitting right on a significant support/resistance level.

Back in early May, we spoke about the USD/CAD resistance zone that price was approaching at the time. We were in the early stages of the most recent bout of USD strength and momentum was clear.

“With the momentum break and re-test of the major bullish trend line all but erased in barely two daily candles, this horizontal zone might not be the level to be blindly fading into.”

Chalk up another failed textbook pattern.

To make money in this game, you need to be a little smarter than blindly selling breakouts.

USD/CAD Daily:
160525_usdcad_daily
Click on chart to see a larger view.

However, while it may not have been a textbook breakout and re-test, the support/resistance zone in question did still re-activate on the support side at the marked ‘red x‘.

I’m a little disappointed I didn’t see this one earlier as it gave two long wick chances to get in on the buy side. The second with unbelievably good risk:reward!

Come on Twitter, help us out here!

———-

Charts of the Day:
What’s a Canadian Dollar chart without an accompanying oil chart, right?

OIL Daily:
160525_oil_daily
Click on chart to see a larger view.

Oil has continued to step higher without even the hint of a pull-back. Is that about to change as price touches the following zone?

———

On the Calendar Wednesday:

NZ Trade Balance

EUR German Ifo Business Climate

CAD BOC Rate Statement
CAD Overnight Rate

Trade with leading ECN Forex Broker, Vantage FX by taking advantage of levels on your own live Forex trading account.

Dane Williams – @VantageFX

———

Webinar Alert: TODAY!

webinar2

Have you registered to reserve your spot in the Vantage FX webinar room?

Risk Disclosure: In addition to the website disclaimer below, the material on this page prepared by Vantage FX Forex does not contain a record of our prices, low spreads or solicitation to trade. All opinions, news, research, prices or other information is provided as general news and learn Forex material – not as investment advice. Consequently any person acting on it does so entirely at their own risk. The experts writers express their personal opinions and will not assume any responsibility whatsoever for the actions of the reader. We always aim for maximum accuracy and timeliness, Australian Forex Broker Vantage FX shall not be liable for any loss or damage, consequential or otherwise, which may arise from the use or reliance on this service and its content, inaccurate information or typos. No representation is being made that any results discussed within the report will be achieved, and past performance is not indicative of future performance.

Social

Free Daily Market Update

Live Spreads

SymbolBidAskSpread

Spread

Sign up to the latest forex news and daily FX trading setups

Get started with a FREE $50,000 demo account