The USDCAD currency pair experienced significant fluctuations, reaching a peak of 1.3676, in response to the Bank of Canada’s decision to leave interest rates unchanged while expressing a bullish outlook on inflation.

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• USD/CAD reacted with volatility, hitting a daily high of 1.3676 after the Bank of Canada kept rates unchanged but maintained a hawkish stance on inflation.

The pair currently trades last at 1.36588.

The previous day high was 1.367 while the previous day low was 1.3589. The daily 38.2% Fib levels comes at 1.3639, expected to provide support. Similarly, the daily 61.8% fib level is at 1.362, expected to provide support.

The USD/CAD trades volatile earlier in the North American session after the Bank of Canada (BoC) decided to hold rates unchanged at 5%, though it maintained a hawkish tone in its monetary policy statement. At the time of writing, the major trades in a wide 1.3620/70 range.

Given that last week’s Canadian Gross Domestic Product (GDP) shrank annually by -0.2% in Q2, triggering market participants’ expectations, the BoC would keep rates unchanged.

In its statement, the BoC Governing Council said that excess demand is cooling. Still, they kept their options open, as they remain concerned about “the persistence of underlying inflationary pressures,” as mentioned in the monetary policy statement.

The BoC added that measures of core inflation remain high, with major global central banks focused on restoring price stability. BoC policymakers added the economy entered a period of weaker growth, which is needed to alleviate price pressures.

The USD/CAD reacted to the upside, reaching a daily high of around 1.3676 before retreating somewhat towards the 50-hour Simple Moving Average (SMA) at 1.3627. Further upside is seen if the major reclaims the daily high, which could pave the way towards 1.3700. On the flip side, if the USD/CAD dives below the 50-HSMA, the next support emerges at the 200-HSMA at 1.3584 before testing the current week’s low of 1.3575.

Technical Levels: Supports and Resistances

USDCAD currently trading at 1.3629 at the time of writing. Pair opened at 1.3642 and is trading with a change of -0.1 % .

The pair remains strongly bullish on the daily timeframe. It trades above its 20 SMA @ 1.3536, 50 SMA 1.3364, 100 SMA @ 1.34 and 200 SMA @ 1.3464.

The previous day high was 1.367 while the previous day low was 1.3589. The daily 38.2% Fib levels comes at 1.3639, expected to provide support. Similarly, the daily 61.8% fib level is at 1.362, expected to provide support.

Note the levels of interest below:

• Pivot support is noted at 1.3597, 1.3553, 1.3516
• Pivot resistance is noted at 1.3678, 1.3714, 1.3758

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