USD/CAD hits weekly highs near 1.3425 after BoC decision

Bank of Canada rises rates as expected, expects to hold now.
Loonie weakens after the announcement.
USD/CAD jumps but then pulls back toward 1.3400.

Matías Salord FXStreet

The USD/CAD jumped by more than 50 pips after the decision of the Bank of Canada and climbed to 1.3425, reaching the highest level since last Friday.

No more hikes?

The Bank of Canada, as expected, raised the key interest rate by 25 basis points to 4.5%. In the statement, the central banks mentioned that will likely hold rates at this level while assessing the impact of recent policy moves.

Following the announcement, the Loonie weakened across the board. The USD/CAD rose from 1.3365 to 1.3426. It then pulled back. Loonie’s crosses remain volatile as market participants digest the decision.

The BoC signals that its intention is to remain on hold which is not a surprise for markets. Analysts were considering that the hike at the January meeting could be the last one, taking into account the current economic outlook.

The USD/CAD retreated under 1.3400 after a few minutes. More volatility is expected. The pair needs to remain well above 1.3400 to keep the doors open to more gains over the next hours. The next resistance stands at 1.3440. The key support is the 1.3340 area and a break lower could trigger a bearish acceleration toward 1.3300.

Technical levels

USD/CAD

Overview
Today last price	1.3366
Today Daily Change	-0.0006
Today Daily Change %	-0.04
Today daily open	1.3372

Trends
Daily SMA20	1.3467
Daily SMA50	1.3503
Daily SMA100	1.3517
Daily SMA200	1.3197

Levels
Previous Daily High	1.3414
Previous Daily Low	1.3347
Previous Weekly High	1.3521
Previous Weekly Low	1.3351
Previous Monthly High	1.3705
Previous Monthly Low	1.3385
Daily Fibonacci 38.2%	1.3372
Daily Fibonacci 61.8%	1.3388
Daily Pivot Point S1	1.3341
Daily Pivot Point S2	1.3311
Daily Pivot Point S3	1.3275
Daily Pivot Point R1	1.3408
Daily Pivot Point R2	1.3444
Daily Pivot Point R3	1.3475

Author

Matías Salord

FXStreet

Matías started in financial markets in 2008, after graduating in Economics. He was trained in chart analysis and then became an educator. He also studied Journalism. He started writing analyses for specialized websites before joining FXStreet.

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