The Bank of Canada surprised markets by hiking rates above forecasts by 1.00%. This saw the Canadian Dollar strengthen and caused the USDCAD price to form a rejection at the highs. Will the price continue lower?
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The Bank of Canada surprised the market with a rate hike of 1.00% which saw the Canadian Dollar strengthen. The USD acted interestingly to the CPI data, the latest release beat forecasts which initially saw the USD rally, however that soon turned with the USD Index falling lower. If the USD is going to weaken on this information and the CAD is going to strengthen, we could see the USDCAD price trade within the range.
The price has formed a bearish engulfing candle at the previous swing highs. This could suggest a move lower is likely as sellers are active at the highs. If the price is going to trade lower from here, we could expect to see a retest of resistance for a short opportunity. The previous day’s low could be an area to look for a rejection, in the past when the price has repeated this pattern, we have seen a rejection of the previous day’s low.
Did you see our NZDUSD analysis? You can watch it here…
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