Trade USDCAD on the Bank of Canada Interest Rate Decision

The Bank of Canada is set to deliver its latest interest rate decision later today, and Canadian dollar traders are bracing for potential volatility following the announcement. The central bank is expected to keep rates on hold, despite lower-than-anticipated inflation data released yesterday—CPI rose only 2.3% compared to the forecast of 2.7%. This subdued inflation is largely attributed to concerns that upcoming U.S. tariffs may add inflationary pressure in the coming months. Nevertheless, the market is still pricing in a 35% chance of another rate cut, which could trigger significant market moves if it materializes.

USDCAD has experienced a volatile month, driven by tariff developments from the U.S. and substantial moves in the oil market. The pair has depreciated over 4%, falling from a high of 1.4415 to a yearly low of 1.3833 just a few days ago. It is now trading just over 100 pips above that low and appears primed for movement following the central bank’s announcement. A rate cut would likely push the pair higher within its recent range, and given recent volatility, that push could be substantial. However, a rate hold with a more hawkish tone—due to anticipated tariff-driven inflation—could extend the recent downside and test new lows.

Resistance 2: 1.4317 – Trendline Resistance
Resistance 1: 1.4059 – 200-Day Moving Average

Support 1: 1.3833 – Trendline Support and 2025 Low
Support 2: 1.3657 – Long-Term Trendline Support

The post Trade USDCAD on the Bank of Canada Interest Rate Decision first appeared on IC Markets | Official Blog.