The Canadian dollar continued the decline against the USD ahead of the Bank of Canada interest rates decision. The following USDCAD analysis gives what next to expect.
March 6, OctaFX – The bank is expected to leave interest rates unchanged at 1.75%. Traders will closely watch the statement from the Governor in which he will explain the rationale of the decision. In recent months, the country’s economy has been slightly sluggish, which is in line with other developed countries.
The country has also been in a challenging political environment, which has seen the resignation of key ministers from Trudeau’s government. This is after it emerged that officials close to Trudeau had helped a Quebec-based construction company avoid prosecution.
USDCAD analysis: pair could continue lower
This month, the USDCAD pair has risen sharply from a low of 1.3127 to a high of 1.3370. The reason for this is the ongoing corruption scandal in the country and the overall USD strength. On the hourly chart, the current price is the highest since January 24.
It is also above the 21-day and 42-day EMAs and along the 50% Fibonacci Retracement level. The RSI has moved up to above 70 while the average directional index has moved to a high of 65. While this trend may continue, the pair could also move lower if the BOC sounds hawkish in its statement.
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