As we have seen tightening in the US by the Fed over the past year, there usually is a correlation with other Western economies following the US lead in returning Monetary Policy to historical levels. In this case, the BoC had increased their rate for the second time in recent months largely following an improvement in GDP Growth, along with price stability in their major export Oil and Gas. Needless to say, BoC is somewhat hamstrung with its ability to continue hiking due to its high household debt levels along with real estate prices in Toronto having dropped 20% since April 2017.
At this point the USD/CAD is trapped below the POC zone 1.2308-1.2336 (order block, trend line, D H3, W L3, 61.8, EMA89) and we could see another rejection if the price retraces to the zone. The MACD is way below the 0 line, while histograms are up so we might see a retracement. However 4h or strong 1h candle close below 1.2148 should target 1.2070 that is a both a weekly and daily support.
W L3 – Weekly Camarilla Pivot (Weekly Interim Support)
W H3 – Weekly Camarilla Pivot (Weekly Interim Resistance)
W H4 – Weekly Camarilla Pivot (Strong Weekly Resistance)
D H4 – Daily Camarilla Pivot (Very Strong Daily Resistance)
D L3 – Daily Camarilla Pivot (Daily Support)
D L4 – Daily H4 Camarilla (Very Strong Daily Support)
POC – Point Of Confluence (The zone where we expect price to react aka entry zone)
