USD/CAD consolidates losses, headed toward lowest close since February

The loonie started to rally 24 hours ago, after comments from Wilkins, Senior Deputy Governor, at the Bank of Canada, who hinted at a hawkish shift at the central bank. Today Governor Poloz said that interest rate have been extraordinarily low, adding to the new rhetoric. 

BoC Wilkins: Governing Council will assess if all monetary stimulus is still required

BoC’s Poloz: Rates have been ‘extraordinarily low’

The USD/CAD pair lost more than 200 pips since Wilkins’s comments and is now headed toward the lowest daily close since February. It bottomed during the American session at 1.3210. Then it bounced to the upside, finding resistance at 1.3245. Near the end of the day, its trading at 1.3230. 

The odds of a rate hike from the BoC are on the rise. While in the US, most analysts expect a rate hike from the Federal Reserve tomorrow. In less than 24 hours, the US central bank will release its statement with the decision and updated macroeconomic projections. Afterward Yellen will held a press conference. If the Fed delivers as expected, analysts will try to find clues about the future path of monetary policy. 

Fed: Market prices a 25bp rate hike - SocGen

Technical levels

To the downside, the immediate support is seen at 1.3220, followed by the 1.3200 handle and then 1.3165 (Feb 21 high). On the upside, resistance is seen at 1.3245 (American session high), 1.3305 and 1.3340 (Apr 13 high).