•USD/CAD strengthened on Tuesday as investors weighed comments by a senior Bank of Canada policymaker and looked ahead to quarterly GDP data at the end of the week..
• The Bank of Canada said on Tuesday that structural changes in the labour market were complicating monetary policy decisions, warning that an incorrect response could increase inflationary pressures.
• Deputy Governor Nicolas Vincent said the central bank can manage cyclical economic pressures through interest rate adjustments, but deeper structural challenges are more difficult to address.
• Economists expect first-quarter GDP data, due on Friday, to show the economy expanding at an annualised rate of 1.5%.
• Investors expect the Bank of Canada to keep its benchmark interest rate unchanged at 2.25% on June 10, according to swap market pricing.
• Immediate resistance is located at 1.3814(Higher BB), any close above will push the pair towards 1.3866(38.2%fib).
• Support is seen at 1.3790(50%fib) and break below could take the pair towards 1.3714(61.8%fib).
Recommendation: Good to buy around 1.3800, with stop loss of 1.3720 and target price of 1.3880
