The USDCAD stays below the 200/100 hour MAs after the BOC keeps rates unchanged. | Forexlive

The Bank of Canada kept rates unchanged at 4.50%. In the statement they said:

“As more households renew their mortgages at higher rates and restrictive monetary policy works its way through the economy more broadly, consumption is expected to moderate this year. Softening foreign demand is expected to restrain exports and business investment. Overall, GDP growth is projected to be weak through the remainder of this year before strengthening gradually next year. This implies the economy will move into excess supply in the second half of this year.”

As Adam points out, “That certainly sounds like a central bank that’s comfortably on the sidelines. The next question is: When will the cuts come?”

What about the price action?

The CAD did soften a little soon after the decision with the price moving up to test its 200 hour moving average at 1.34800 (green line in the chart above), but sellers leaned against the risk defining level, and the price has since rotated back to the downside.

The pair currently trades at 1.3440 just off the low for the day at 1.34316. The sellers remain more in control technically below the 200 hour moving average (green line in the chart above), and the 100 hour moving average currently at 1.34916 (blue line in the chart above). Ultimately it would take a move above both those moving averages to tilt the bias back to the upside from a technical perspective

The next downside target comes in at 1.34251 which was home to session lows from April 5. Dip buyers in the USDCAD, may be leaning against that level in hopes there is more sellers of the CAD on the dips. Having said that, there would be work to do to give buyers in the USDCAD more control (i.e., getting above the 200 and 100 hour moving averages).

A move below 1.3425 would have traders targeting the low price from April 4 at 1.3405. Below that the rising 200 day moving average at 1.33921 is a another key support target.