The USDCAD has reacted to the upside after the Bank of Canada kept rates unchanged.
The key piece in the statement said:
“The Governing Council decided to end its extraordinary commitment to hold its policy rate at the effective lower bound. Looking ahead, the Governing Council expects interest rates will need to increase, with the timing and pace of those increases guided by the Bank’s commitment to achieving the 2% inflation target.”
That those keep the window open for a rate hike at the next meeting.
The press conference will begin at 11 AM ET.
The initial move has as it seen the price extend higher and above its 100 day moving average at 1.26178. The high price reached 1.26379. The current price is trading at 1.2630.
Staying above 1.26095 to 1.26178 will be eyed now as a risk level on the downside. Looking at the hourly chart, that area includes the 100 day moving average and swing levels going back to the end December. A move below would disappoint the buyers (at least in the short term), and could see a move back toward the rising 100 hour moving average at 1.25797.
Move below the 100 hour moving average and things would turn back to the downside with the 200 hour moving average at 1.25458 as the next key target
On the topside, the 38.2% retracement at 1.26445, a swing level at 1.2666, and a swing area between 1.2690 and 1.27054 would be upside targets. The 1.27054 is the 50% retracement of the move down from the December 20 high. Getting above that level and staying above would be more bullish.