The Bank of Canada will announce or constrict decision at 9:45 AM. BoC expected to hold rates at 2.25%, maintaining a cautious, “wait-and-see” stancePolicy balance: Weak growth and labor market vs. inflation risks from higher energy prices (US–Iran conflict)Inflation backdrop:Headline CPI rose to 2.4% (energy-driven)Core (Trimmed-Mean) eased to 2.2% (near target)Growth outlook:Sluggish economy + weak jobs data lean toward easingBut risk of second-round inflation keeps BoC sidelinedNew forecasts expected:Higher inflation projectionsLower growth outlookKey concern: Whether energy-driven inflation spills into wages and expectationsAdditional risk: Uncertainty around CUSMA renegotiationsMarket expectations: Pricing in a rate hike in Q4 2026What to watch:Any shift in tone toward earlier tighteningOr pushback against market pricingBottom line: Likely no change and limited volatility, with emphasis on data dependencyAhead of the rate decision, USDCAD is trading marginally lower, holding within a tight ~21 pip range. Zooming out, the pair has been locked in a broader ~120 pip range over the past nine trading days, with back-and-forth volatility keeping directional conviction limited.That consolidation has pulled the 100- and 200-hour moving averages together at 1.3666, creating a clear barometer for buyers and sellers. Staying above keeps the bias tilted higher, while a move below would shift the near-term bias back to the downside.On the topside, the 61.8% retracement of the move from the March low at 1.3693 remains a key resistance level. The price tested and stalled against it earlier today. A break above that level, along with a push through last Friday’s high, would open the door for a run toward the 100-day moving average at 1.3731. Notably, the pair has remained below that 100-day MA since the break lower on April 15, keeping the broader bias in check.On the downside, a move below the 1.3666 MA cluster would target the next swing area between 1.3620 and 1.3630. Break that, and attention shifts toward Friday’s low near 1.3596.In the video above, the key levels are mapped out in more detail, with a focus on how price action around these zones will define the next directional move. This article was written by Greg Michalowski at investinglive.com.