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BoC Preview: What’s expected of USD/CAD

FXStreet (Edinburgh) - The Bank of Canada will hold its monetary policy meeting later on today, with market consensus universally expecting the central bank to leave rates unchanged at 0.5%.

It is worth mentioning that there won’t be a Monetary Policy Report (MPR) or a press conference by Governor S.Poloz, solely leaving the statement to provide an update of the central bank’s views.

In the FX space, today’s steady stance and just a few updates expected of the BoC will leave the Canadian dollar on the sidelines. Regarding USD/CAD, the main driver in the medium term continues to be the prospects of a Fed’s lift-off in just a couple of weeks, while energy prices keep playing their role as significant catalysts on the CAD-side.

In terms of USD/CAD levels, November’s high at 1.3437 emerges as the interim hurdle ahead of YTD peak at 1.3459. Running on the opposite direction, the initial support aligns around the 1.3220/00 area - where sits the 55-day sma and the 38.2% Fibonacci retracement of the 1.3459-1.2827 down-move, followed by the vicinity of 1.3100 the figure (7-month uptrend) and the 1.3030 region, November’s lows.

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