Bank of Canada kept rates unchanged
The Bank of Canada keep rates unchanged and The commitment to keep interest rates at historical low levels are the next few years, but did not promise any new support. The rate was kept at 0.25% and said they would keep the rate there until 2023 (at least). They also reiterated that they would continue to buy government bonds at the current pace of C$4B per week. Rates remain low until inflation is sustainably achieved at 2%.
The USDCAD has been trending to the downside on the back of a lower USD trend. Oil price rise has also helped the loonie of late.
However, the fall in the USDCAD has found a floor around the 1.27674. The low on Monday reached 1.27704. The low on Tuesday reach 1.27674. The low today reached 1.27688.
Since bottoming, the price has rebounded higher. Lower oil prices after the inventory data may have helped the move back higher. However, the pair is started to run into topside resistance including the falling 100 hour moving average at 1.28136 (see blue line in the chart above). The high price just ticked to 1.28131 and backed off a bit.
It will take a move above that level and then a trend line crossroad at 1.2825 area. The high for the week reach 1.28322 on Monday.
Stay below that cluster and the sellers still have more control. With the price near low levels, the buyers have to prove that they can take back control from the sellers. That includes getting back above the 100 hour moving average as a minimum requirement.
Overall, the range for the week is relatively narrow with a low at 1.27674 and a high at 1.28322 (64 pips). That is near the lowest range for a calednar week. I know, we are only 1/2 way through the week, but it suggests there may be room to roam (either higher or lower). The 100 hour MA is a key bias defining clue for both buyers and sellers.
