Canadian dollar Moves in Stiff Boundaries Ahead of BOC’s Interest Rate Decision, 40+ PIP Volatility Likely; April 21, 2021
Bank of Canada’s Interest Rate Decision
Today BOC will release Interest Rate Decision at 1400 GMT/1930 IST. It’s the primary tool the BOC uses to communicate with investors about monetary policy. It contains the outcome of their decision on interest rates and commentary about the economic conditions that influenced their decision. Most importantly, it discusses the economic outlook and offers clues on the outcome of future decisions. Since March 2020, BoC has kept the interest at record low at 0.25 pct. Today markets expect no changes will be made in Interest Rate by Central bank but any hint regarding economic recovery and growth expectations will only provide further directions to the CAD.
On one hand, Canada has released all the key economic indicators with the satisfactory numbers like Job market is strong, efficient consumer spending, housing data are too improving and production activities are too expanding at its fastest pace but on the other side, Covid situation is getting worse in Canada day by day. The most populous regions in Canada are under lockdown with new restrictions imposed by this week only. In Ontario, Govt bans on indoor dining and fitness activities till May end. In Toronto, residents are required to remain at home at all times except for essential purposes. In other parts of the country, Night Curfew from 8 pm to 5 am is levied.
Canada is facing the 3rd wave of Virus fear just because of slow vaccination procedure. People in Canada have started taking vaccines but is will take some time for the economy to come back on track.
Let’s see how CAD has reacted during the previous data release:
USD/CAD: The Canadian dollar exhibits range bound movement ahead of Inflation results and Interest Rate Decision. The pair made intraday high at 1.2616 and low at 1.2583 mark. A day chart is bearish and H1 Chart with triple EMA confirms up trend for the time being. A sustained close above 1.2618 on H1 chart requires for the upside rally. Alternatively, a consistent close below 1.2580 will check key supports too.
Key Resistances: 1.2618, 1.2640, 1.2670, 1.2692, $1.2715
Key Supports: 1.2580, 1.2565, 1.2540, 1.2518, 1.2490
Take a look and do trade wisely!