USD/CAD struggles, opens new opportunity.
“Canada inflation rate is more persistent than BoC expected, which may warrant for more aggressive rate hike.”
Canadian dollar received ample bidding for the week as greenback decides to extend its weakness. Last week, Bank of Canada surprises the market with 100-basis point rate hike to combat rising inflation. Inflation in Canada which currently hovers at an annual rate of 7.7% during May toppled the central bank’s previous quarter estimates. During last week’s meeting, BoC emphasized that inflation remains as the top priority, signaling more aggressiveness ahead in terms of tightening.
Quick recap on USDCAD
USDCAD continues to trade within an ascending channel as it recently rejected from the top level.
USDCAD Weekly Technical Analysis
The pair is currently testing at 1.2855 which coincides with 200-MA line, indicating possible strong support that may limit the pair’s downside.
USDCAD Daily Technical Analysis
From daily perspective, MACD shows prominent bearish signal, which may be amplified following a successful close below 1.2855.
ORDER: SELL STOP
STOP LOSS: 1.2920
Target 1: 1.2730
Target 2: 1.2670
ZFX Analyst’s Comment
In the near-term, USDCAD portrays possibility for an extension towards the downside due to recent rejection from the top level of the channel.
Risk Warning: The above content is for reference only, and does not represent ZFX’s position. ZFX does not assume any form of loss caused by any trading operations carried out in accordance with this article. Please be firm in your thinking and do the corresponding risk control.
ZFX (Zeal Capital Market) is an FCA & FSA licensed online Forex & CFD broker providing more than 100 products for Forex, commodities, stock indices, and share CFDs. Open a trading account with min. USD 50 deposit and download our MT4 trading platform now!