USD/CAD extends BOC-led sharp up-move, jumps back to 200-DMA
|The Canadian Dollar extended dovish BOC-led weakness against its US counterpart, with the USD/CAD pair surging back to the very important 200-day SMA.
Currently hovering around 1.3165 region, the pair built on to Wednesday's sharp reversal from the vicinity of 1.3000 psychological mark after BOC, in a quarterly outlook, lowered its projections for growth and inflation. On Wednesday, the pair initially plunged to monthly lows after BOC held its benchmark interest rate at 0.5% but quickly reversed as market participants considered the central bank’s decision as dovish.
Meanwhile, retracement in crude oil prices is also weighing on the commodity-linked currency - loonie, and extending further support to the pair's bid tone, which remains underpinned by Hillary Clinton's win in the third and final US presidential election debate.
Going forward, today's US economic releases that include - Philly Fed manufacturing index, weekly jobless claims and existing home sales, might provide some short-term trading opportunities, while ECB monetary policy decision-led FX market volatility could also provide some impetus.
Technical levels to watch
Immediate upside resistance is pegged at 1.3183 (weekly high) above which the pair could aim towards reclaiming 1.3200 handle and head towards 1.3225-30 horizontal resistance area. On the downside, 1.3130 seems to protect immediate downside. Weakness below this immediate support is likely to be bought into and hence, might limit further downside at 1.3100 round figure mark support.
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