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USD/CAD hits fresh lows as BoC holds rates

FXstreet.com (Córdoba) - The Canadian dollar remained virtually unchanged, holding onto mild gains versus the greenback, after the Bank of Canada decided to left the overnight rate target on hold at 1% as expected, while maintaining the hawkish tone in the statement.

"The considerable monetary policy stimulus currently in place will likely remain appropriate for a period of time, after which some modest withdrawal will likely be required", said the BoC.

USD/CAD rose slightly to the 1.0370 area right after the release, but then fell to fresh daily lows at the 1.0350 area. At time of writing, the pair is trading around 1.0350/55, 0.4% below its opening price. The loonie managed to cut losses during the European and NY sessions after falling to a 1-year low versus the USD.

As for technical levels, next supports could be found at 1.0345 (100-hour SMA) and the 1.0300 area (psychological level/10-day SMA). On the other hand, if the pair resumes the upside, resistances line up at 1.0420 (2013 high) and 1.0446 (2012 Jun high).

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As widely expected, the Bank of Canada decided to keep its overnight rate unchanged at 1% in May. It emphasized that growth as well as inflation were in line with projections and that a slow economic recovery was in progress.
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The yellow pushed slightly higher during the European session, ultimately failing to breach the 1400 resistance despite operating positively. A break above the handle’s resistance around 1400.00 may signal an upside reversal eying 1445.00, however a potential movement below the support at 1378.00 shall signal the continuation of the bearish wave targeting 1320.00 low. At the time of writing, the price of gold has fallen to intraday lows at USD $1385.23 per oz.
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