Bank of Canada interest rate decision ahead. What to look for technically.

The Bank of Canada's interest rate decision will be announced at 9:45 a.m. with a 50 basis point rate cut expected.

Adam explains the basic idea in his post here:

In my video below, I analyze the key technical levels that influence the USDCAD rate decision. With the pair trading near four-year highs at 1.4175, sellers are facing the burden of proof to regain control from a technical perspective. If they fail, the upward trend is likely to continue.

The next major top target is the April 2020 highs near 1.4270. A break above this level could pave the way for more upside momentum.

But what would move the tendency towards the lower side? In other words, what could make buyers more cautious and give sellers more confidence in a potential correction to “sell the truth”?

On the hourly chart, a critical swing area from the past three weeks is at 1.4145. A move below this level would indicate a small win for the sellers. Below that, the 100-hour moving average rise at 1.4127 and the swing range between 1.4086 and 1.4104 are the next targets. At the lower end of that range, the rising 200-hour moving average at 1.4087 adds more technical significance.

Until the price breaks below these levels, the buyers will be in control. While a sustained move below 1.4145 could gradually build sellers' confidence, sustaining momentum is key to a broader move.

In the video, I delve deeper into these dynamics to help you be informed and prepared in your trading decisions.

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Here are more detailed technical levels in play for the USDCAD ahead of the Bank of Canada's interest rate decision:

Resistance Levels:

1. 1.4175: Current price, near four-year highs and potential short-term resistance level.

2. 1.4270: April 2020 Highs, an important top target and potential resistance level.

Support levels:

1. 1.4145: Critical swing area from the last three weeks, minor impact for sellers if broken. This level has been tested and held several times, making it a key support level.

2. 1.4127: Rising 100-hour moving average, which has supported the pair in recent sessions.

3. 1.4104-1.4086: A swing range, which has served as support and resistance in the past. Traders are likely to keep a close eye on this area.

4. 1.4087: Rising 200-hour moving average, which adds more technical significance to the swing area 1.4104-1.4086.

Breakdown and reversal rates:

1. Above 1.4270: A break above this level could pave the way for more upside, with possible targets at 1.4350 and 1.4420.

2. Below 1.4086: A break below this level could shift the trend to the downside, with possible targets at 1.4050 and 1.4000.