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).