Wednesday 11 July 2018

Loonie broke 1.3100 on BoC’s rate hike


Bank of Canada raised the key rate by 25 bps to 1.50%, as it was largely anticipated. The Bank keeps its projection for close to 2% GDP growth over 2018-2020 and sees unprtentious effects of tariffs on economic growth and prices. As the time of writing the USD/CAD pair is trading at 1.3117, correcting from the 3-week low at 1.3065 on the rate hike announcement from BoC. Technically apeaking the short term outlook remains neutral to bearish. On the four hour time frame the price is developing below the flat 50-day and 100-day SMAs and also the flat 20-day SMA is marching with the current price.RSI and stochastic are showing bearish momentum but yet remain above their mid-lines. 
Stong support is provided by the 1.3100 level which was for shortly broken today. The pair vulnerable around this area so I expect another test and in case of success bears will try next one at 1.3064. Looking to the upside first resistance is seen at 1.3174 and second at 1.3193.




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