USD/CAD jumps more than 150 pips after FOMC meeting
|USD/CAD rose sharply after the FOMC meeting boosted by a rally of the greenback across the board. Rate hike expectations for December rose significantly and boosted the US Dollar and pushed US yields higher. Equity prices in Wall Street turned to the downside.
The loonie remains among the worst performers. USD/CAD rose from 1.2270 to 1.2390, reaching the highest level in two weeks. The pair remains near the highs holding a strong bullish tone.
With the recent rally, the pair ended two days of limited price action, within a range between 1.2230 and 1.2300.
As expected, the Fed kept rates unchanged and announced that it will begin to unwind the balance sheet in October, after 9 years of expansion. According to the Fed, hurricanes are unlikely to affect the medium-term path of the economy.
Janet Yellen Speech - Fed Live Stream
FOMC statements: Comparison between July and September
FOMC's decisions regarding monetary policy implementation - Sep 20, 2017
Technical outlook
Volatility currently is elevated and is likely to continue that way during Yellen’s press conference. The pair now holds a strong bullish tone and it could rise to test a very significant level around 1.2410/20: a horizontal resistance and also a downtrend line. A break higher could open the doors for an extension of the rally.
A slide below 1.2290 would remove strength out of the US dollar while a consolation under 1.2190 could expose 2017 lows.
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