BOC Up Next
The Bank of Canada July rates meeting will be the main focus for traders today. On the back of the RBNZ hiking rates overnight, the BOC is widely expected to hike rates also, with the market pricing in a .75% hike. Given that the hike is priced in, the greater focus will be on the guidance and outlook given along with the rate decision.
If the BOC is seen sticking to its hawkish projections, signalling an intention to press ahead with further hikes, this should keep CAD well-supported near-term. However, if the bank has softened in its outlook at all, or is seen sounding more alarmed over the potential impact on growth, this might lead CAD lower over the week. Additionally, given that rate forecasts for this meeting have shifted from .5% to .75%, should the bank underwhelm these expectations and opt for a smaller .5% hike, this would also weigh on CAD.
Where to Trade The BOC Meeting?
EURCAD
The recent breakdown in EURCAD has seen the pair blowing through prior 2022 lows and testing its lowest level since 2015. Price is currently sitting on those 2022 lows and, while within the broader bear channel, the focus is on a break lower an a test of the 1.3031 level next. Should price correct higher from here, bears can look to trade a retest of the broken 1.3384 level as resistance.
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With 10 years of experience as a private trader and professional market analyst under his belt, James has carved out an impressive industry reputation. Able to both dissect and explain the key fundamental developments in the market, he communicates their importance and relevance in a succinct and straight forward manner.