The Canadian dollar this week showed a ‘violent’ movement on the price chart as it was influenced by crude oil market sentiment as well as the Canadian central bank’s policy meeting.
Let's take a closer look at the price movement on the USD/CAD currency pair chart.
On Tuesday, the price jumped around 140 pips following the weak movement of the Canadian dollar which was affected by the decline in crude oil prices.
Yet in Wednesday’s trading yesterday, the Canadian dollar was significantly stronger after the results of the Canadian central bank meeting rocked the USD/CAD chart with a plunge of almost 200 pips!
The Bank of Canada (BOC) has met expectations to tighten policy by reducing weekly government bond purchases by $ 1 billion.
The economic growth forecast by the BOC has also been enhanced for the year to 2023.
On the USD/CAD chart yesterday, the price initially rose to the high of 1.26500 before plunging to the support zone of 1.24700.
The support zone has remained supportive of falling prices since last week and has yet to be penetrated.
After prices plunged significantly after the BOC meeting, the price movement slowed back until the end of the New York session and continued on today’s trading.
The decline below the 1.24700 level is seen to head back to the 1.24000 level which supported the decline in March trading.
However, if the 1.24700 support still fails to be broken and the price returns to make a rise above 1.25200, a higher rise is expected again towards the 1.26000 level and the 1.26300 resistance zone.
