Usdcad At 4 Months High Ahead Of Boc Policy

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Usdcad At 4 Months High Ahead Of Boc Policy

USD/CAD At 4-Months High Ahead of BoC Policy

During the Asian session, the USD/CAD pair made a new 4-month high near the 1.3744 price level. The recent buying interest in the US Dollar against the CAD comes after Jerome Powell's hawkish comments.

Technically speaking, the recent comments from Jerome Powell were bullish USD. In the case of USD/CAD, it appears that the Canadian Dollar is also losing ground against the US Dollar.

All Technical Indicators Forecast More USD/CAD Upside

It appears that USD/CAD has finally come out of its consolidation phase that lasted for 7 days. In addition, the USD/CAD has also pierced its bearish descending triangle pattern on the daily charts.

The downward trendline in the USD/CAD starts from the 13th October high, located at 1.3978. Similarly, the horizontal support in the USD/CAD is present at 1.3226 (15th November low).

The 10 EMA is also present near 1.3634, which suggests that the momentum in USD/CAD is very powerful. The recent price action is also a prime example of how the strength of one currency can outperform all other currencies.

If we look at the RSI(14) on the USD/CAD chart, it is moving in the range of 60 to 80 (bullish zone). However, let's not forget that is also the range that gives the overbought signal.

According to experts, the real action in the USD/CAD will start when the BOC announces its interest rate decision. In the USA, we already have a hawkish central bank that is lending strength to the USD against the CAD.

But if Tiff Macklem (governer of BoC) adopts a more hawkish policy than the Fed, then the current tide in the USD/CAD could turn in the favor of the Canadian Dollar.

For the most part, the Bank of Canada is expected to keep its current policy unchanged. The central bank of Canada believes its current policy is good enough to take the sticky inflation in the country.

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