- – The US Dollar fell sharply below the 1.2350 support against the Canadian Dollar.
- – There is a major descending channel pattern with resistance near 1.2350 forming on the hourly chart of USD/CAD.
- – Recently in Canada, the BoC Interest Rate Decision (Sep 2017) was announced by the Bank of Canada.
- – The central bank opted to increase the interest rates from 0.75% to 1.00%, whereas the market was not expecting any increase.
BoC Interest Rate Decision
However, the central bank opted to increase the interest rates from 0.75% to 1.00%. As per the central bank statement, there was a strong recovery and pick up in the economic data, which made them to form a view that growth in Canada is becoming more broadly-based and self-sustaining. The report added that:
Given the stronger-than-expected economic performance, Governing Council judges that today’s removal of some of the considerable monetary policy stimulus in place is warranted.
USD/CAD Technical Analysis
The US dollar started a major downtrend from the 1.2660 high against the Canadian Dollar. The USD/CAD pair traded lower by more than 200 pips and broke many support levels such as 1.2450, 1.2400 and 1.2300.
The pair even moved below the 100 hourly simple moving average and the 1.2200 handle. A low was formed at 1.2135 from where the pair started a recovery. It has already moved above the 23.6% Fib retracement level of the last decline from the 1.2414 high to 1.2135 low.
It seems like the pair is facing resistance near 1.2240 and consolidating losses at the moment. The 38.2% Fib retracement level of the last decline from the 1.2414 high to 1.2135 low at 1.2242 is also acting as a barrier for buyers.
Moreover, there is a major descending channel pattern with resistance near 1.2350 forming on the hourly chart of USD/CAD. As long as the pair is below the 1.2350-1.2400 resistance, it would continue to decline in the near term.Tags: BoC Interest Rate Decision, Canadian Dollar, US Dollar, USD/CAD Technical Analysis