At 9:45 AM ET, the Bank of Canada (BoC) will announce its rate decision (see Adam's preview here). The outcome is uncertain, with markets split on whether the central bank will cut rates or hold steady. Before the recent wave of tariffs, the BoC appeared poised to slow its easing cycle. However, the expected drag on growth from those tariffs has reintroduced doubt into the market.

Despite the uncertainty, the Canadian dollar has strengthened (the USDCAD has moved lower), with USDCAD falling to a low of 1.38278 on Monday—its weakest level since November 2024. The pair has since rebounded and now trades near the falling 100-hour moving average at 1.3915. That level will act as the near-term barometer: staying below keeps sellers in control. A move above could shift bias higher, with the 200-day moving average near the psychological 1.4000 level serving as a key resistance target. A break above that would be more bullish for the pair.

On the downside, the low price from earlier this week at 1.38278 will be eyed. Move below that level and the pair starts to trade more in a longer term up and down swing area that goes back to September 2022 and increases the bearish bias.

IN the video above, I talk through the technical levels in play to - and through -the key rate decision. Be aware. Be prepared as traders decide if the break of the 200 day is warranted.

Source: Forex Live