Equity markets followed Wall Street indices lower during Asia-Pacific trade, as rising coronavirus cases gnawed at risk appetite. Australia‘s ASX slipped 0.29%, while Japan’s Nikkei 225 and Hong Kong‘s Hang Seng Index tumbled 2.05% and 1.75% respectively. China’s CSI 300 index bucked the trend, climbing 0.32%.To get more news about WikiFX, you can visit wikifx.com official website.

  In FX markets, the haven-associated Japanese Yen and Swiss Franc outperformed alongside the cyclically-sensitive Canadian Dollar, while the Australian Dollar and Norwegian Krone declined against their major counterparts. Gold and silver prices extended gains as yields on US longer-term Treasuries held relatively steady.

  Looking ahead, a speech from Bank of England Governor Andrew Bailey leads the economic docket, as investors turn their attention to the Bank of Canadas upcoming interest rate decision and Canadian inflation data.The Bank of Canadas upcoming interest rate decision may not be as straight forward as market participants are expecting, given the marked tightening of coronavirus restrictions in several provinces.

  Ontario extended its current emergency stay-at-home order, introduced earlier this month, from four to six weeks and has limited essential stores operating capacity to just 25%.

  The province has also set up checkpoints along the border with Quebec and Manitoba in order to limit the movement of residents, and the capital city of Torontos health authorities have ordered workplaces to close if they have more than five confirmed cases of the novel coronavirus.These worrying developments could prompt the BoC to hold fire on tightening some of its monetary policy levers at its meeting later today. The central bank is expected to cut its weekly bond purchases to $3 billion from $4 billion, as the local economy continues to recover robustly.

  Indeed, with 90% of the jobs lost due to the fallout of the pandemic regained, and gross domestic product expected to rebound back above pre-pandemic levels in subsequent quarters, a slight reduction of bond purchases hardly seems too much to ask.

  Nevertheless, the Loonie could extend losses against the Greenback should the BoC fail to deliver the expected taper, or spook markets with more dovish-than-expected commentary.From a technical perspective, USD/CAD rates appear poised to extend recent gains, as yesterdays 0.58% surge drove the exchange rate through the downtrend extending from the March 2020 high to challenge the trend-defining 55-EMA (1.2607).

  With the RSI bursting above its neutral midpoint, and price tracking comfortably above all three short-term moving averages, the path of least resistance seems higher.

  A daily close above 1.2610 would probably invite bullish follow-through and propel price towards the February 26 high (1.2748). Hurdling that brings the yearly high (1.2881) and sentiment-defining 200-MA (1.2947) into the crosshairs.

  However, if the 55-EMA successfully neutralizes buying pressure, a retest of the monthly low (1.2471) could be on the cards.The IG Client Sentiment Report shows 52.81% of traders are net-long with the ratio of traders long to short at 1.12 to 1. The number of traders net-long is 14.88% lower than yesterday and 30.27% lower from last week, while the number of traders net-short is 1.81% higher than yesterday and 45.22% higher from last week.

  We typically take a contrarian view to crowd sentiment, and the fact traders are net-long suggests USD/CAD prices may continue to fall.

  Yet traders are less net-long than yesterday and compared with last week. Recent changes in sentiment warn that the current USD/CAD price trend may soon reverse higher despite the fact traders remain net-long.