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USD/CAD tanks to 1.4500 on steady BoC

Discussion in 'Fundamental Analysis' started by FXStreet_Team, Jan 20, 2016.

  1. FXStreet_Team

    FXStreet_Team Well-Known Member Trader

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    FXStreet (Edinburgh) - The Canadian dollar has erased earlier losses vs. the greenback, sending USD/CAD to test lows in the vicinity of 1.4500 the figure, albeit rebounding afterwards.

    USD/CAD lower post-BoC decision

    CAD is now trading on a firmer footing after the Bank of Canada has left its monetary policy stance unchanged at today’s meeting, with the repo rate at 0.5%. It is worth mentioning that market consensus were quite divided on today’s outcome.

    The central bank added that domestic growth ‘stalled’ during the last quarter, while the decline in commodity prices remains a ‘setback’ for the economy. The BoC revised lower its growth forecast for 2016 to 1.4% from 2.0%.

    The BoC noted that the excess capacity of the economy has expanded throughout 2015, while market conditions appear to be losing momentum.

    USD/CAD significant levels

    As of writing the pair is losing 0.31% at 1.4514 and a break below 1.4177 (20-day sma) would aim for 1.3793 (low Dec.24) and finally 1.3790 (3-month uptrend). On the other hand, the next resistance is located at 1.4672 (high Apr.24 2003) and then 1.4946 (high Apr.7 2003).
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