THE BANK OF CANADA RAISED THE INTEREST RATE TO 0.75%
The US dollar is showing a high volatility after was released the statement of Janet Yellen - the Governor of the Fed. The statement includes thoughts about inflation the slowing of which has been caused by the number of untypical price drops in some categories of products. FOMC consider gradual rate growth to be suitable during the next couple years. In the second quarter, American economy gained impulse and such dynamics may continue due to an improved situation in the world economy and growing consumer spending. Investors are waiting for tomorrow’s report on inflation in the US and in the case of its acceleration, the EUR/USD price is likely to fall.
We should mention that support for the euro today was the positive statistics on industrial production in the Eurozone, which has grown by 1.3% in May that is 0.3% better than expected. The mood of traders may influence the release of the Beige Book at 18:00 GMT.
The volatility of oil prices remains high due to the news about the growth of output in OPEC countries by 1.4% in June to 32.61 million barrels per day. The main focus remains on the volumes of production within OPEC and drilling activity together with inventories in the US.
The Canadian dollar sharply appreciated after was released the decision of the Bank of Canada to raise interest rates in the country by 0.25% to 0.75%. Such step was highly anticipated, but still, we have seen the strong descending movement of USD/CAD. We should also mention the positive influence of the crude oil price growth on Canadian currency
The common currency has fallen after the speech of the Fed’s chairwoman in Congress. In the case of breaking through the strong support at 1.1380, the immediate goals will be at 1.1300 and 1.1200. The RSI on the 15-minute chart is close to the oversold zone that points to the possible price rebound within which the first target will be at 1.1450. The overcoming of psychologically important resistance at 1.1500 is less likely after the speech of Mrs. Yellen.
After a long consolidation of USD/CAD near the level of 1.2900, the price has shown a strong downward impulse. The trigger for this move was the rate hike by the Bank of Canada to 0.75%. In the case of breaking the lower limit of the channel and the support at 1.2800, we may see continued decline to 1.2665. We do not exclude the price correction after the recent drop to the closest target at 1.3000.
The WTI price has gained a foothold above 45.40 and continued increase within which has overcome 46.00. This fact will stimulate the bulls to pull the quotes further upwards. The immediate targets in such case will be at 47.00 and 47.75. The RSI on 15-minute chart is in the overbought zone that indicates the possible retreat to 46.00 or 45.40.