📊 Canadian Dollar Churns as Markets Await BoC Rate Call

The Canadian Dollar (CAD) saw limited movement on Tuesday as traders await the Bank of Canada’s (BoC) midweek rate decision. With markets broadly expecting a 50 bps rate cut, the CAD faces potential volatility.

🔎 Market Highlights

Tight Trading Range: The CAD found stability against the US Dollar, trading within a tight tenth of a percent range.

BoC Rate Cut Expected: The BoC is expected to cut rates by 50 basis points (bps) on Wednesday as the Canadian economy continues to slow.

Rates at 23-Year High: The BoC's benchmark rate hit 5.0% in mid-2023 but has since been trimmed by 75 bps in 2024, with the current rate at 4.25%.

Economic Data Weakness: Canada’s Raw Material Price Index fell 3.1% in September, worse than the forecast -1.7%, while Industrial Produce Prices also declined 0.6% month-on-month.

📈 CAD Price Forecast

USD/CAD Recovery: The pair has bounced from the 200-day EMA near 1.3619, currently consolidating around 1.3820.

Bullish Momentum: Higher lows and a rising 50-day EMA at 1.3651 point to continued bullish sentiment.

Key Levels to Watch:

Breakout above 1.3850 could push the pair toward 1.3900.

A dip below 1.3650 may signal a deeper retracement.

📊 Technical Indicators

MACD: Bullish, with the MACD line above the signal line, although momentum may be slowing.

Watch for: A breakout or pullback to confirm the next directional move.

🔍 As the BoC's decision looms, CAD traders are poised for potential market shifts. Stay tuned!

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