USD/CAD sinks to 1.3050 after steady BoC

Pablo Piovano FXStreet

The Canadian dollar is picking up pace vs. its neighbour today, sending USD/CAD to fresh lows in the mid-1.3000s.

USD/CAD weaker on BoC decision

The pair met extra selling pressure after the Bank of Canada left its key rate unchanged at 0.50% at today’s meeting, broadly in line with prior surveys.

The central bank, however, revised lower its forecasts for this year’s economic growth to 1.1% (from 1.3%) and for 2017 to 2.0% (from 2.2%). The BoC now expects the output gap to close around mid-2018, ‘materially later than expected’.

Regarding inflation, the central bank said core consumer prices remain close to the 2% target.

CAD is also deriving support from the buoyant tone in crude oil prices, with the barrel of West Texas Intermediate up near 2% to levels above the $51.00 mark ahead of the weekly report on crude inventories by the DoE.

USD/CAD significant levels

As of writing the pair is retreating 0.54% at 1.3049 and a breach of 1.3026 (100-day sma) would open the door to 1.2996 (low Sep.22) and then 1.2926 (5-month support line). On the flip side, the next hurdle aligns at 1.3172 (200-day sma) followed by 1.3314 (high Oct.7) and finally 1.3575 (50% Fibo of the 2016 drop).

Author

Pablo Piovano

FXStreet

Born and bred in Argentina, Pablo has been carrying on with his passion for FX markets and trading since his first college years.

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