USD/CAD Outlook (04 March 2020)

Overall, USD/CAD is trending upwards. Recently, USD/CAD tested but failed to break the support level of 1.33150 after the U.S. Federal Open Market Committee announced an emergency interest rate cut of 0.50%, causing a weakness in USD.
The Bank of Canada (BoC) will be announcing their interest rate decision later at 2300 (SGT).
It is expected that the BoC will cut interest rate by 0.50%.
With the worsening condition of the coronavirus outbreak and the recent plunge in oil prices, it is likely that the BoC will be cutting interest rate in response to the economic risks that have been building up. However, it is more likely that the BoC will take a 0.25% cut instead of a 0.50% cut since the Canadian economy has been performing well as can be seen from the positive economic indicators.
USD/CAD’s next support level is at 1.33150 and its next resistance level is at 1.34400.
If the BoC cuts interest rate by 0.25% or keep interest rate unchanged at 1.75%, the Canadian dollar may strengthen and if it does, look for selling opportunities of USD/CAD down until the support level of 1.33150.
If the BoC cuts interest rate by 0.50%, the Canadian dollar may weaken, stay out of USD/CAD.