Standing Pat! The Shoes Drop for USDCAD as Both Central Banks Hold Fire

Summary:

In its July interest rate decision, the Bank of Canada announced that it would keep the target for the overnight rate at 2.25% and the bank rate at 2.5%.

Buy USDCAD

EXP

Trading

1.40436

ENTRY

1.45000

TGT

1.38000

1.40188 -0.00218 -0.16%

Point

Flat

1.38000

CLOSING

1.40436

ENTRY

1.45000

TGT

Fundamentals

In its July interest rate decision, the Bank of Canada announced that it would keep the target for the overnight rate at 2.25%, the bank rate at 2.5%, and the deposit rate at 2.20%. This marks the sixth consecutive meeting at which rates have remained unchanged, in line with widespread market expectations. All 36 economists surveyed by Reuters had predicted that the central bank would keep rates unchanged, and the money markets also expect rates to remain stable for the remainder of the year. The central bank stated that the global economy continues to face significant uncertainty. The conflict in the Middle East, which has persisted for several months, has led to rising energy prices and disruptions to global supply chains, weighing on global economic growth and pushing up inflation. Uncertainty surrounding U.S. trade policy also continues to affect Canada’s economic outlook.

Recently released U.S. inflation data also indicates that price pressures have eased somewhat. According to the U.S. Department of Labor, the Producer Price Index (PPI) for final demand fell 0.3% month-over-month in June, below market expectations of no change, while May’s figure was also revised downward; the year-over-year increase slowed to 5.5% from 6.0% in May.

Technical Analysis

Looking at the USD/CAD on the 4-hour chart, the Bollinger Bands are widening downward, and the moving averages are diverging downward, indicating a high probability that the pair will test the round number level. The RSI stands at 29, indicating the market has entered oversold territory and a rebound could occur at any time. On the daily chart, the Bollinger Bands are narrowing, moving averages have flattened, and following a MACD death cross, the fast and slow lines are retracing toward the 0-line—though they remain some distance away, suggesting the correction is not yet complete. With the RSI at 41, market sentiment remains predominantly bearish. Strategically, look to buy on dips.

Standing Pat! The Shoes Drop for USDCAD as Both Central Banks Hold Fire_1

Standing Pat! The Shoes Drop for USDCAD as Both Central Banks Hold Fire_2

Trading Recommendation

Trading Direction: Buy

Entry Price: 1.403

Target Price: 1.45

Stop-Loss Price: 1.38

Support Levels: 1.39, 1.38, 1.37

Resistance Levels: 1.42, 1.45, 1.48

Risk Warnings and Investment Disclaimers

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Tank

Analysts

20 years of trading experience, specializing in naked price action analysis, Elliott Wave Theory, and Chan Theory. Has conducted in-depth research on forex, stocks, and cryptocurrencies. Achieved a tenfold profit during the 2005 bull market and doubled profits within one month of entering the crypto market in 2015. Adheres to the trading philosophy: "Trend is king; focus on the big picture, act on

Rank

Articless

863

Win Rate

74.16%

P/L Ratio

0.67

Focus on

GBPUSD

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