x
Breaking News
0

CAD Plunges As BoC Urges Caution

By IronFX (IronFX Strategy Team)ForexDec 07, 2017 09:15AM ET
www.investing.com/analysis/cad-plunges-after-boc-urges-caution-200271311
CAD Plunges As BoC Urges Caution
By IronFX (IronFX Strategy Team)   |  Dec 07, 2017 09:15AM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 

CAD plunges after BoC urges caution

  • The Bank of Canada kept its policy unchanged yesterday, as was widely anticipated, while the statement accompanying the decision had a relatively dovish tone. Even though the Bank noted the strength of recent economic data, such as employment and inflation figures, it appeared quite hesitant to signal any near-term rate hikes. Instead, policymakers ended the statement by indicating that they will continue to be cautious in making future adjustments to the policy rate.
  • The Loonie plunged on the decision, possibly due to the absence of any hawkish signals that investors may have expected given the strength of the aforementioned data. Moving forward, the currency’s near-term direction will likely depend on the evolution of incoming data, as they could determine whether the BoC will hike in Q1 2018. At the time of writing, market pricing suggests roughly a 60% probability for a hike by March, according to Canada’s overnight index swaps. Should fresh Canadian data be strong in the next weeks, this percentage could rise and thereby, push CAD higher. On the other hand, weaker data could bring USD/CAD under renewed buying interest.
  • USD/CAD surged after the BoC decision from near the 1.2660 (S2) support level to break above the resistance (now turned into support) level of 1.2750 (S1). During the European morning Thursday, the rate looks to be headed for a test of the 1.2840 (R1) hurdle. Despite yesterday’s surge, we believe that the pair could continue to trade in a sideways manner in the range established from the 25th of October, between the 1.2660 (S2) support barrier and the 1.2920 (R2) resistance. For the picture to turn to positive, we would like to see a clear break above the 1.2920 (R2) level. Something like that would signal a higher high on the 4-hour chart and could set the stage for more bullish advances, towards the 1.3000 (R3) zone. On the other hand, a break back below the 1.2660 (S2) support barrier could turn the picture negative, and open the way for further declines towards 1.2600 (S3).

Bitcoin briefly tops 14,000

  • Bitcoin continued to soar yesterday, briefly breaching the USD 14000 (R1) level, before pulling back a little. As usual, there was no clear fundamental catalyst behind the surge. Interestingly enough though, while BTC was gaining yesterday, other smaller alternative cryptocurrencies fell. This may signal that investors who owned alt-coins are opting for Bitcoins, given its ever-increasing popularity.
  • Bitcoin prices surged yesterday after finding fresh buy orders slightly below 11900 (S2), to break briefly above the 14000 (R1) barrier. Should the bulls remain in the driver’s seat, we could see the cryptocurrency break the 14500 (R2) barrier and aim for the psychological territory of 15000 (R3). In case of a correction lower, we could see Bitcoin break below the 11900 (S2) support level and aim for 11000 (S3).

Today’s highlights:

  • From Canada, we get the Ivey PMI for November, though no forecast is available.
  • As for the speakers ECB President Mario Draghi will hold a press conference on the Basel banking reforms.

USD/CAD
USD/CAD

Support: 1.2750 (S1), 1.2660 (S2), 1.2600 (S3)

Resistance: 1.2840 (R1), 1.2920 (R2), 1.3000 (R3)

Bitcoin
Bitcoin

Support: 13000 (S1), 11900 (S2), 11000 (S3)

Resistance: 14000 (R1), 14500 (R2), 15000 (R3)

CAD Plunges As BoC Urges Caution
 

Related Articles

CAD Plunges As BoC Urges Caution

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind: 

  • Enrich the conversation
  • Stay focused and on track. Only post material that’s relevant to the topic being discussed.
  • Be respectful. Even negative opinions can be framed positively and diplomatically.
  •  Use standard writing style. Include punctuation and upper and lower cases.
  • NOTE: Spam and/or promotional messages and links within a comment will be removed
  • Avoid profanity, slander or personal attacks directed at an author or another user.
  • Don’t Monopolize the Conversation. We appreciate passion and conviction, but we also believe strongly in giving everyone a chance to air their thoughts. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

 
Are you sure you want to delete this chart?
 
Write your thoughts here
 
Replace the attached chart with a new chart ?
Post
Post also to:
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
 
Are you sure you want to delete this chart?
 
 
Replace the attached chart with a new chart ?
Post 1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Continue with Google
or
Sign up with Email