USD/CAD falls sharply to daily lows near 1.2500 after BoC policy announcements


  • USD/CAD came under strong bearish pressure in the American session.
  • BoC decided to lower weekly asset purchases to C$3 billion.
  • BoC sees first rate hike coming in second half of 2022.

After rising to a session high of 1.2653 in the early American session, the USD/CAD pair came under strong bearish pressure and lost more than 100 pips. As of writing, the pair was down 0.7% on a daily basis at 1.2519.

BoC's policy statement boosts CAD

As expected the Bank of Canada (BoC) left its policy rate unchanged at 0.25% after the April policy meeting. Additionally, the BoC announced that it will lower its weekly purchases of Canadian government bonds to C$3 billion from C$4 billion.

In its policy statement, the bank noted that the current projections point to a rate hike in the second half of 2022. The BoC's hawkish outlook provided a boost to the CAD and weighed heavily on USD/CAD.

On the other hand, the US Dollar Index (DXY) erased a portion of its earlier gains, suggesting that the greenback is having a tough time outperforming its major rivals. At the moment, the DXY is up only 0.08% on the day at 91.28.

Later in the session, BoC Governor Tiff Macklem will be delivering his remarks on the policy outlook at a press conference.

Technical levels to watch for

USD/CAD

Overview
Today last price 1.2513
Today Daily Change -0.0096
Today Daily Change % -0.76
Today daily open 1.2609
 
Trends
Daily SMA20 1.2564
Daily SMA50 1.2587
Daily SMA100 1.2676
Daily SMA200 1.2946
 
Levels
Previous Daily High 1.2624
Previous Daily Low 1.2479
Previous Weekly High 1.263
Previous Weekly Low 1.2477
Previous Monthly High 1.274
Previous Monthly Low 1.2365
Daily Fibonacci 38.2% 1.2568
Daily Fibonacci 61.8% 1.2534
Daily Pivot Point S1 1.2518
Daily Pivot Point S2 1.2426
Daily Pivot Point S3 1.2373
Daily Pivot Point R1 1.2663
Daily Pivot Point R2 1.2716
Daily Pivot Point R3 1.2808

 

 

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