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.

USD/CAD Looking for direction ahead of BoC

USD/CAD pair has lost directional strength and is seen in narrow trading range today slighty above the 1.24 mark. It seems that market participants are not likely to take part ahead of Wednesday's BoC monetary policy decision. The 85% probability per Bloomberg for rates hike will boost the CAD’s strength but in case BoC postpone hikes for the next meeting the USD/CAD would be poised to test the resistance provided by the 38.2% Fibo retracement of latest bullish run at 1.2585. Lookind to the downside first support is seen at the psychological barrier at  1.24, below which the pair might extend its downward slope towards the 61.8% Fibo of same retracement at 1.2385.  

 

USD/CAD Flashed higher

Loonie is seen uplifted today and marked fresh weekly high at 1.1824. The USD/CAD pair is up with 0.36% and currently is trading at 1.2808, which is impressive having in mind yesterday’s low at around 140 pips below. Against the majors from Europe the greenback maintains strength, but meanwhile the Canadian dollar suffered as recent weak inflation readings occurred to be surprising. The Financial System Review from the Bank of Canada brought nothing new for markets, but expectations for rate hikes in March 2018 remained intact. Technically speaking the pair maintains bullish short term outlook. On the four hour time the price is located well below its moving averages, having bullish 20-day SMA and flat 100-day and 200-day SMAs. RSI and stochastic are located within their extreme overbought areas, but both are starting to lose directional strength. The USD/CAD pair was seduced by the last week’s high at 1.2835, but as it’s seen failed to grab it. Bulls would fee more confident only above the resistance at 1.2860 and this might force them to test next one at 1.2895. Looking to the downside, bears are trilled by the 23.6% Fibonacci retarcement of latest September to October bullish run around 1.2720.