BoC rate decision next: impact on USD/CAD

FXstreet.com (Córdoba) - The Bank of Canada interest rate decision and statement on monetary policy come next during the American session, being the last meeting with Carney's as Governor. Market consensus points for another month on hold, keeping the overnight target rate at 1.0%.

"However, what can actually affect Canadian Dollar is the Central Bank economic outlook on growth, and reviews over previous forecasts", says Valeria Bednarik, chief analyst at FXstreet.com. "An upward revision that suggests a brighter economic future should help CAD advance, particularly against weaker currencies such as JPY, while a downward revision will support further CAD slides, particularly against USD".

In terms of price action, the CAD has taken advantage from broad USD weakness on Wednesday, with USD/CAD pulling back from a 1-year high of 1.0420 to the 1.0360 area. If USD/CAD extends the correction, next supports could be found at 1.0345 (100-hour SMA) and the 1.0300 area (psychological level/10-day SMA). On the other hand, if the BoC surprises and the pair resumes the upside, resistances line up at 1.0420 (2013 high) and 1.0446 (2012 Jun high).