On Wednesday, the 5th of December, the event calendar is quite rich in important data releases and the event of the day is the Bank of Canada interest rate decision during the NY session. Moreover, the other data scheduled for release are PMI Services and PMI Composite from across the Eurozone, PMI Services data from the UK and the Retail Sales data from the Eurozone. There is a speech from Fed Chairperson Jerome Powell scheduled later today as well.
USD/CAD analysis for 05/06/2018:
The BoC interest rate decision is scheduled for release at 03.00 pm GMT and the market participants expect the BoC to leave the rate unchanged at the level of 1.75%. The BoC will issue a statement once the decision is made. This statement is the primary medium used by the Bank of Canada (BoC) to communicate with investors about monetary policy decisions, specifically those regarding interest rates.
If the BoC is hawkish about the inflationary outlook of the economy and raises the interest rates it is positive, or bullish, for the CAD. Likewise, if the BoC has a dovish view on the Canadian economy and keeps the ongoing interest rate, or cuts the interest rate it is seen as negative, or bearish.
Let's now take a look at the USD/CAD technical picture at the H4 time frame before the BoC decision is made. The market has got back to the channel after a false breakout and a bounce from the level of 1.3158. Not the target for bulls is seen at the level of 1.3345 or even 1.3383. The strong and positive momentum supports the short-term bullish outlook. The nearest technical support is seen at the level of 1.3240.