Bank of Canada Governor Tiff Macklem commented on inflation risks and the outlook for monetary policy following the BOC’s rate decision. His comments could impact the value of the CAD. Inflation is too high.Inflation is very concentrated in gasoline and oil prices.Risks are shifting, and we are prepared to adjust monetary policy as needed.The bigger issue for inflation is what is happening in the Middle East, how long oil prices stay high, and how high they go.We have to keep our eye on inflation; it is running too high.Where we go on rates will be guided by our inflation forecasts and the risks around those forecasts.Recent bond route shows more than one thing happening at once.Central banks tolerance for higher inflation is limited. We are seeing some spillover of global bond yields into Canada, we will take that into account.The USDCAD is trading at new session lows as Bank of Canada Governor Macklem highlights inflation risks. A lower USDCAD means the Canadian dollar is strengthening against the US dollar. His inflation concerns could give traders reason to expect Canadian interest rates to stay higher for longer, helping support the CAD. However, US inflation and the outlook for Federal Reserve policy also influence the pair. Keep that in mind. Trading in currencies is about two currencies and two economies. Sometimes those dynamics for each can be the same. From a technical perspective, sellers have pushed the price below the 200-hour moving average at 1.3858, shifting attention to the next key support level: the 200-day moving average at 1.3839. Moving averages help traders assess direction and identify areas where buying or selling may emerge.Why does 1.3839 matter? On both Friday and yesterday, buyers stepped in near that moving average and pushed the price higher. Those repeated bounces make it an important reference point. Buyers have defended the level before. Can they do it again?For beginning traders, there are two scenarios to watch:Break below and stay below 1.3839: That would suggest buyers are losing their grip on support and could encourage further selling. A brief dip below is less convincing than a sustained break.Hold support at 1.3839: Buyers could step in again. Traders who sold after the rate decision may also buy back their positions to take profits, potentially helping the price bounce.Sellers have the near-term momentum, but the 200-day moving average is the next important test. If support holds, watch whether a rebound can reclaim 1.3858. If support breaks and the price stays below it, sellers would strengthen their control.More from Macklem: (11:04 AM ET):Multiple rate increases could be needed if we felt inflation is a problem.If monetary policy does not to what it needs to do to achieve its objectives, the markets will reprice (the comment is Fed Chair Warsh-esq. That is yields will reflect reality. That in turn runs counter to Treas Sec. Bessent who said that the yield market is wrong. That rates out the curve are too high and announced that the Treasury will look to buy bonds to lower them). This article was written by Greg Michalowski at investinglive.com.