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Apr 20, 2018

BOC ON HOLD WHILE CRYPTOCURRENCIES AND COMMODITIES MOVE HIGHER

BANK OF CANADA ON HOLD

The Canadian dollar moved lower against a basket of top-tier currencies this week, as Bank of Canada policy makers kept interest rates on hold, disappointing foreign exchange traders and investors. The Bank of Canada also left investors unclear over any upcoming rate hikes, hinting that the BOC may be become more accommodative towards monetary policy. The USDCAD pair firmed towards the 1.2700 level, after finding weekly support from the 1.2520 region, as traders priced-in a less hawkish stance from the Bank of Canada.

  • The USDCAD pair remains bearish while trading below the 1.2740 level, further losses towards 1.2500 and 1.2380 remains possible.

  • If the USDCAD pair moves above the 1.2740 level, buyers may test towards the 1.2840 and 1.2910 level.

CRYPTOCURRENCIES MOVING HIGHER

Cryptocurrencies continued to push higher after last week's strong rebound, as investors again bet on the future of blockchain technology, and a decentralized digital asset revolution. Bitcoin held firm above the $8,000 level, while other alternative coins such as Bitcoin Cash and Ripple made solid double-digit upside moves. Ethereum, the second largest digital currency by market capitalization managed to trade well-above the $500 handle, while Litecoin and Dash broke back above key long-term moving averages.

  • The ETHUSD pair remains bullish while trading above the $490 level, further upside towards $580 and $670 seems p ossible.

  • Should price-action decline below the $490 level, sellers may test towards the $460 and $400 levels.

COMMODITY BUYING CONTINUES

The price of West Texas Intermediate Oil edged closer to $70 per barrel this week, marking its highest trading level since December 2014, as traders factored in a drop in American oil inventories. Brent oil also rose to a three and a half-year high of $73.96, as tensions in Syria and the middle-east boosted overall buying demand for oil. Hawkish comments from the Saudi Arabian government also emboldened WTI and Brent oil prices further this week, as Saudi officials put out a bold statement that oil prices may soon rise to $80 per barrel.

  • The NZDUSD pair remains bullish while trading above the $0.7310 level, further upside towards $0.7400 and $0.7455 seems possible.

  • If the NZDUSD pair declines below the $0.7310 level, sellers may test the $0.7280 and $0.7220 support levels.

POUND FLUCTUATES

The British pound suffered a week of extreme volatility against the U.S dollar, caused by speculation over future rate hikes from the Bank of England. The GBPUSD pair rose to its highest-trading level since the day of Brexit, hitting 1.4377, in early week trading, as sterling bulls bet the BOE would soon hike rates. The British pound later tumbled lower against the greenback, as monthly UK Inflation and Retail Sales data came in worse than expected. Bank of England Governor Mark Carney added further pressure to sterling, as he struck a dovish tone towards future rate hikes, pushing the GBPUSD pair below the 1.4100 level.

  • The GBPUSD pair is bearish while trading below the 1.4244 level, further losses towards 1.4000 and 1.3760 remain possible.

  • The GBPUSD pair is only bullish while trading above the 1.4244 level, further upside towards 1.4376 and 1.4440 seems possible.

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