CANADIAN DOLLAR PRICE OUTLOOK: USD/CAD, EUR/CAD IN FOCUS FOLLOWING BOC ANNOUNCEMENT The Canadian Greenback was a combined bag on
CANADIAN DOLLAR PRICE OUTLOOK: USD/CAD, EUR/CAD IN FOCUS FOLLOWING BOC ANNOUNCEMENT
The Canadian Greenback was a combined bag on Wednesday with Loonie energy versus its US Greenback and Yen friends offset by weak point extra broadly. CAD worth motion edged decrease towards its FX counterparts mid-session in response to the most recent Financial institution of Canada announcement, which disenchanted some expectations for a barely extra hawkish tone. Canadian Greenback bulls had been largely unfazed by cautious outlook discovered within the BoC assertion, nevertheless, seeing that the central financial institution remains to be thought of more likely to sign QE tapering within the close to future.
USD/CAD PRICE CHART: DAILY TIME FRAME (12 OCT 2020 TO 10 MAR 2021)
USD/CAD popped about 50-pips in fast response to the most recent Financial institution of Canada rate of interest determination, although the transfer was light as buying and selling progressed. In reality, the Canadian Greenback closed the session close to intraday highs towards its US Greenback cousin. USD/CAD whipsawed decrease because the US Greenback weakened broadly alongside a deeper pullback in Treasury yields. That mentioned, we might see a resumption of USD/CAD promoting strain as Canadian Greenback bulls set their sights again on year-to-date lows.
| Change in | Longs | Shorts | OI |
| Each day | 4% | 1% | 3% |
| Weekly | -5% | -11% | -7% |
This follows the most recent shut under its 20-day easy shifting common. To not point out, waning upward momentum highlighted by the MACD indicator and relative energy index each underscore constructive technical developments for USD/CAD bears. The 50-day and 100-day easy shifting averages might come into focus as potential areas of resistance to fade short-winded bouts of energy.
EUR/CAD PRICE CHART: WEEKLY TIME FRAME (31 OCT 2016 TO 10 MAR 2021)
EUR/CAD worth motion edged barely larger on the day as bulls try and defend the 1.5000-handle. Taking a look at a weekly EUR/CAD chart we are able to see the foreign money pair does look a contact oversold. That is highlighted by the relative energy index as effectively, which hovers round 35. As such, there might be potential for a counter-trend rebound larger within the short-term.
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If EUR/CAD does catch a bid off present ranges, Canadian Greenback bulls would possibly think about reloading close to the 8-week easy shifting common. This might hinge on the premise that the Financial institution of Canada remains to be probably to supply steering on scaling again its tempo of QE, and that crude oil costs might proceed climbing. The resumption of EUR/CAD promoting strain might prime the Canadian Greenback for an additional check of the broader bullish development prolonged by the early 2017 and 2020 lows.
— Written by Wealthy Dvorak, Analyst for DailyFX.com
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