Live up to expectations!
The anticipation of the outcome of the Bank of Canada (BOC) policy meeting has finally been revealed and meets expectations for the central bank to make ‘tapering’ by ending weekly bond purchases.
As a result of these factors, the BOC also wants to plan on raising interest rates in the earlier period and indirectly continue to drive the Canadian dollar to show strengthening.
The impact of the loonie dollar's dominance seems to have stagnated following a sharp drop in crude oil prices in yesterday's (Wednesday) trading session due to disappointing EIA data.
Nevertheless, the price movement on the USD/CAD chart is seen to show little attempt to break the SBR (support become resistance) zone of 1.24000 in the European session (Wednesday) before returning to plunge.
The plunge appears to have been pressured by a policy tightening set by the BOC during the start of the New York session yesterday with a jump of over 100 pips to re -test the 1.23000 support zone.
However, the support zone has already supported the surge at the end of the session and continued into today's trading session (Thursday) until heading back to the Moving Average 50 (MA50) barrier level.
The price is likely to continue to decline to test the support zone of 1.23000 again if the price movement reacts to make a ‘retracement’ of the trendline support.
The bearish trend will be clearly visible if the price continues to plummet to lower levels and is expected to record the latest 4 -month lows.
On the other hand if the price is able to break the SBR zone of 1.24000 at this time, the aggressive surge momentum will observe the price movement reaching to the next SBR zone at 1.25000.
