The Dollar Adjusted Amid a Pause in Tariff Policy

Against the backdrop of global economic uncertainty, trade wars, and anticipation of key decisions by central banks, major currency pairs continue to show sensitivity to macroeconomic developments.

Today, market participants are focused on the Bank of Canada meeting, where a decision on the base interest rate will be announced. This event may significantly impact the pricing of USD/CAD. Simultaneously, changes in the monetary policy of the ECB and the Bank of Japan also remain in the spotlight for investors, which could lead to a rebalancing of positions in EUR/USD and USD/JPY pairs.

In the coming days, markets will closely monitor central bank statements, which may set a new direction for major currency pairs.

USD/CAD

Last week, dollar sellers in the USD/CAD pair managed to break through key support at 1.4000. The pair fell sharply, losing around 200 pips. Technical analysis of USD/CAD indicates a potential upward correction towards recently broken levels, as a “piercing candle” pattern has formed on the daily time frame. If the price drops below 1.3900, a retest of this year’s low at 1.3830 is possible.

Key events likely to influence USD/CAD in the coming hours:

• Today at 16:45 (GMT+2): Bank of Canada Monetary Policy Report
• Today at 16:45 (GMT+2): Bank of Canada Accompanying Statement
• Today at 16:45 (GMT+2): Bank of Canada Interest Rate Decision
• Today at 17:30 (GMT+2): Bank of Canada Press Conference
• Today at 17:30 (GMT+2): US Crude Oil Inventories

USD/JPY

USD/JPY buyers managed to slow the downward trend around 142.10–142.00. Yesterday, the price attempted to consolidate above 143.00, but as we can see, unsuccessfully. Technical analysis of USD/JPY indicates a possible continuation of the downward momentum towards last year’s lows around 141.00–139.60.

Key events likely to affect USD/JPY in the upcoming trading sessions:

• Today at 15:30 (GMT+2): US Retail Sales
• Today at 20:00 (GMT+2): 20-Year US Treasury Bond Auction
• Today at 20:15 (GMT+2): Speech by Federal Reserve Chair Jerome Powell
• Today at 23:00 (GMT+2): Net Long-Term TIC Flows (foreign purchases of US long-term securities)

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