90% chance of a hike
The BOC are expected to announce a rate hike of 25 bps to 1.75% from 1.5% at 10 AM ET/1400 GMT tomorrow (presser at 11:15 AM ET/1515 GMT). The last hike took place in July 11th when they hiked from 1.25% to 1.5%. The market is pricing in a 90% chance of a hike tomorrow. All 22 economists on Bloomberg are on board for a hike.
Technically, the price of the USDCAD has been consolidating near the highest levels since September 11th. The price on the daily chart above, has kept a lid on the pair against a topside trend line at 1.3124 over the last three trading days. That level also corresponds with the swing high from March. That topside trend line is a close hurdle for the bulls. Get above, is more bullish.
On the downside, the price has closed the last 4 trading days above the 100 day MA at 1.30662. That is a close support for the pair. A move below, and the bias will shift more to the bearish side for the pair.
Drilling to the hourly chart below, the rising 100 hour MA (blue line) comes in at 1.30727. It is moving toward a swing area defined by highs and lows over the last 4-days at 1.30787 to 1.30872 (see yellow area in the chart below). They are above the 100 day MA. A bearish move below those progressive levels and then the 100 day MA shows more selling interest.
On the topside the 1.3120 level is a topside trend line that now has 3 points on it (see blue circled numbers). Get above is a clue for more buying interest, with the high from Friday more of a confirmation.
When there is a 90-100% chance of a change in policy, you gotta think that it is all baked in the cake.
However, we know that markets can also latch onto a word, or sentence, or even chart point.
There is still a number of hours left to the 10 AM ET decision, but the technical levels are mapped out for now with a move above 1.3124 more bullish, and a break below the 100 day MA at 1.3066 more bearish. That is how the market is defining the close risk/bias levels.