CAD little changed ahead of BoC policy decision - Scotiabank

USD/CAD is essentially flat as markets await the BoC policy decision. The economists' consensus has swung to no change after anticipating a 25bps cut until late last week, Scotiabank's Chief FX Strategist Shaun Osborne notes.

Trend momentum oscillators remain bearishly aligned for USD

"But 15 of the 17 submissions to the Bloomberg survey since last Friday have stumped for no change, shifting consensus expectations to a hold, largely reflecting swaps pricing which anticipates only 5bps of easing risk. Even though policymakers are likely to sit on their hands this week amid a host of uncertainties, their messaging is likely to be dovish, keeping the door open for more easing in the months ahead."

"Dovish-leaning comments may weigh on the CAD to some extent but unless the statement/press conference bolster market conviction on the timing or scale of cuts, the CAD is unlikely to ease too far. Note the CAD continues to trade comfortably a little above estimated fair value (1.3791 today). The policy decision is 9.45ET. Governor Macklem and Senior DG Rogers speak at 10.30ET."

"Spot is holding a tight trading range between 1.3700/50, within Monday's range. While the near-term trend is flat, the overall technical picture for the USD remains bearish amid a succession of lower lows and lower highs. Trend momentum oscillators remain bearishly aligned for the USD across the intraday, daily and weekly studies. Minor resistance sits at 1.3750. There is stronger resistance at 1.3850/60. Support is 1.3680/00."