The USD/CAD is holding in the tight range of $1.3070 – $1.3115 as the investors are in a state of indecision. The uncertainty is caused by the Bank of Canada which is widely expected to hike the interest rates by 25 base points.

At the moment, the USD/CAD is trading near $1.3080, having an immediate resistance near $1.3095. While the support can be found at $1.3065. Now we got to deal with two scenarios and that’s the rate hike or no hike.

BOC Rate Hike – Initial Reaction

Fundamentally, the pair should take a sharp dip towards the initial target level of $1.3050 and the violation of this level can cause another round of selling until $1.2975. The idea is to set a sell stop right 10 pips below the CMP (current market price) to capture quick 50- 100 pips.

BOC Leaves the Rate Unchanged – Initial Reaction

Just in case the BOC decides not to hike the interest rate and I wish it happens, we may see more than 100/150 pips spike in the USD/CAD. All we need is to capture 50/60 pips to make our day. On the upper side, the pair can target $1.3120 and $1.3165 today.

Good luck!