USD / CAD is slightly lower on the forex during the New York session, trading at 1.2654 at the time of writing, after the Bank of Canada (BoC) kept the discount rate unchanged at 0.25%, as expected by market participants.
Market reaction
As evidenced by the one-hour chart, the USD / CAD pair fell on the forex towards 1.2652, easing the bullish move, then the pair retreated below the December 7 low around 1.2635, only to rebound. where it was swaying at the time of publication.
In its statement, the Bank of Canada said it expects CPI inflation to remain high in the first half of 2022, but expects it to moderate in the second half, around 2%. In addition, commented that the CPI is high and that “the impact of global supply constraints is reflected in a wider range of prices of goods”.
Regarding the economic outlook, the Bank of Canada said the economy had “considerable momentum” in the fourth quarter, including improving labor market, which brought the employment rate back to pre-employment levels. pandemic. However, flooding in British Columbia and the uncertainty of the omicron variant “could weigh on growth by exacerbating supply chain disruptions, reducing demand for some services”.
The Bank of Canada commented that “given the continued excess capacity” the Canadian economy would continue to need monetary policy support and stressed that it is “committed to maintaining the rate. Until the economic downturn is absorbed. According to the Bank of Canada’s October projection, this will happen in the intervening quarters of 2022.
USD/CAD : perspectives techniques
In the one hour chart, the pair USD / CAD has a bearish bias, as evidenced by the Hourly Simple Moving Averages (SMAs) which are well above the spot price. Also, a substantial consolidation around the December 7th low at 1.2635, former support turned resistance, as evidenced by the seven candles discarded by the aforementioned resistance.
Nonetheless, in the event of a bullish breakout, the first resistance would be the daily high at 1.2663. A clear break out of this level would expose key resistance levels, with the central daily pivot at 1.2679, followed by the 50 hour SMA moving average at 1.2688, then the R1 daily pivot at 1.2723.
On the flip side, if 1.2635 holds, it will put downward pressure on the forex for the USD / CAD pair, exposing critical support areas. The first support would be at 1.2600, followed by the S1 daily pivot at 1.2591, and the S2 daily pivot at 1.2547.
Par Christian Borjon Valencia, FXStreet
Christian Borjon, Forex News Editor at FX Street, has been an experienced trader for six years in Forex and CFD commodities. He worked at CITI Banamex (CITI branch in Mexico) as a Forex Market Maker for a year and a half. Christian holds a UA Business Administration degree from C, Mexico. Like many other traders, he started taking a course and learning the hard way. Christian later discovered it and became obsessed with fundamental analysis and macroeconomics, as well as its influence on financial markets.
The opinions expressed here are those of the author alone and do not necessarily reflect the views of Forex Quebec. Every investment and trading move comes with risk, you should do your own research when making a decision.
Disclaimer: The information and opinions contained in this report are provided for general information only and do not constitute an offer or a solicitation to buy or sell currency contracts or CFDs. Although the information contained in this document has been taken from sources believed to be reliable, the author does not guarantee its accuracy or completeness, and assumes no responsibility for any direct, indirect or consequential damages that may result from the fact that someone relies on such information.
