USD/CAD reverses post-BoC losses

Ani Salama FXStreet

USD/CAD bounced sharply and climbed to fresh daily highs as the Canadian dollar failed to hold the BoC-inspired gains.

USD/CAD dropped to a low of 1.3005 after the Bank of Canada left policy unchanged and cut GDP forecasts for 2016, 2017 and 2018. However, USD/CAD quickly recovered the lost ground and rose to a daily peak of 1.3140 in recent dealings despite strong gains seen in oil prices over the last hours. At time of writing, the pair is trading at 1.3134, up 0.19% on the day.

The Bank of Canada left its target for the overnight rate at 0.5% while downgrading the country’s growth forecast. The Bank expects Canada’s real GDP to grow by 1.1% in 2016, down from 1.3% previously projected, and about 2% in both 2017 and 2018, down from previous estimates of 2.2% and 2.1%.

USD/CAD levels to watch

In terms of technical levels, next resistances are seen at 1.3171 (200-day SMA), 1.3200 (psychological level) and 1.3219 (Oct 14 high). On the flip side, supports are seen at 1.3069 (50-day SMA), 1.3024 (100-day SMA) and 1.3005 (Oct 19 low).

Author

Ani Salama

FXStreet

Ani Salama is an Economist specialized in financial markets and statistics analysis. In 2010, she joined FXstreet where she now contributes with the news section.

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