The Bank of Canada (BoC) meeting today will be a key catalyst for CAD price action across the remainder of the week and into the next. With the BoC among the more hawkish of the G10 central banks, expectations are geared towards tightening expectations.
In light of the uncertainty around Omicron, the market is not looking for any policy adjustment today so the focus will instead be on the forward guidance. Given the strong economic momentum in Canada, the BoC is likely to stick to an upbeat outlook, keeping rate hike expectations well primed as we head into 2022, leading CAD higher on the back of the meeting.
Where to Trade The BoC Meet
The GBP/CAD pair recently broke down out of the bear flag structure, signaling a continuation of the bear trend. Currently, the price is testing below the 1.6734 level and with the retail market more than 90% long, while below here, the next target to play for is the 1.6551 level and a test of the bear channel lows.
Any CAD strength on the back of today’s BoC meeting should be enough to pressure the pair towards target, especially given the very weak sentiment towards GBP currently amidst yet more political scandals for the government and rising Omicron infection numbers.
