- Bearish sentiment surrounds the Canadian dollar due to expectations of the central bank holding interest rates, though a hawkish hold is possible.
- The USD/CAD faces resistance levels at 1.36936 and 1.37189, with indications that overcoming these levels may not be too challenging.
Will bearish bets on the Canadian dollar grow in the lead up to Wednesday? It is widely expected that the Canadian central bank will leave interest rates on hold during its meeting that concludes on this day (Although, it may be a hawkish hold as the Governor Tiff Macklem will mention that another hike is still on the table for the bank).
Perhaps piling on the bearish sentiment is the slight fall in the price of oil (one of Canada’s major exports), as US diplomatic efforts continue to contain the conflict between Israel and Hamas. How long this quietish period can last is up for debate though, and a ground offensive by the IDF in Gaza could send oil prices higher.
Bullish takes on the USD/CAD (i.e., bearish bets on the Loonie) will have 1.37350 to content with, which is the high the pair reached before cratering to 1.36712 to start the week. 1.36936 is the more immediate resistance for bull to cross before even thinking about the day’s high. The RSI’s weakness suggests this won’t be too difficult though, and 1.37189 might be the more formidable resistance.
