The Canadian dollar was among the currencies focused on trading in the New York session yesterday following Canadian inflation data published ahead of key points at a Canadian central bank policy meeting.
The Bank of Canada (BOC) has maintained its interest rate unchanged at 0.25% and expressed efforts to continue to support Canada's economic recovery.
Policy makers also published better economic growth projections for 2022 with a number of supporting factors such as fiscal plans and commodities.
As shown in the price movement on the USD / CAD currency pair chart yesterday, the price has plunged almost touching the 1.26000 level below the support zone of 1.26300.
A significant decline in prices occurred after the BOC meeting results with daily declines recorded around 120 pips.
Reports of the cancellation of the Canadian Keystone XL pipeline plan by President Joe Biden appear to have had no effect on the Canadian dollar following a focus on BOC meetings. However, investors need to be aware of the possibility of the Loonie recession due to these factors.
The Asian session on Thursday saw slow price movements and still hovering above the 1.26000 level.
A lower drop below that level will push the price down towards the support level around 1.25200. This level was last touched by the price was in April 2018.
If the price jumps again, the resistance level is seen at 1.26700 and the Moving Average 50 (MA50) resistance at the 1 hour price movement will signal for a reversal of the price trend.
The next higher rise will lead to the resistance zone at 1.27800 and also 1.28300.
