BoC rate decision is a major focus today, together with Canadian CPI. BoC is widely expected to keep policy rate unchanged at 1.75%. The central bank appeared to have downplayed some downside surprises in recent economic data. Risks of receded with US-China trade deal phase one and ratification of USMCA in US Congress. The test for resilience of the Canadian economy could be over for now, and need of insurance rate cut largely vanished. The next move would be very much data dependent.
Suggested previews on BoC:
- USD/CAD Poised To Breakout With BOC On Tap
- Bank Of Canada To Hold Rates Steady But Loonie Could Drift Lower
- BOC to Leave Rate Unchanged at 1.75%. Disappointing Data Likely Due to Temporary Factors
- Forward Guidance: Trade Deals Just One Factor in BoC’s Outlook
CAD/JPY turned into consolidation after forming a short term top at 84.56 last week. At this point, further rally is still in favor as rise from 78.50 could extend to 85.23 resistance and above. However, structure of such rise is no clearly impulsive. 61.8% retracement of 78.50 to 83.55 from 81.28 was met without follow through buying. Upside momentum has been diminishing too as seen in daily MACD. Break of 82.80 support will suggest that such rise is completed, and turn outlook bearish for 81.28 support and below.
