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Hello CAD: USD/CAD tests prices below 1.1200 amid BoC rate decision

The USD/CAD's climb from 1.1220 to highs was capped at 1.1290 following the BoC decision to maintain unchanged its interest rate at 1% and its somehow hawkish economic statement. The pair is declining fast to daily lows below the 1.1200 area.

"The Bank of Canada today announced that it is maintaining its target for the overnight rate at 1 per cent," affirms the BoC in its press release. "The Bank Rate is correspondingly 1 1/4 per cent and the deposit rate is 3/4 per cent."

BoC rose its 2014 global growth outlook as well as it removes the "neutral" world from its monetary policy statement.

The BoC also comments that "although the outlook remains for stronger momentum in the global economy in 2015 and 2016, the profile is weaker than in July and growth prospects are diverging across regions."

However, the BoC is hawkish in exports as "Canada’s exports have begun to respond. However, business investment remains weak. Meanwhile, the housing market and consumer spending are showing renewed vigour and auto sales have reached record highs, all fuelled by very low borrowing rates."

Currently, USD/CAD is trading at 1.1206, down 0.12% on the day, having posted a daily high at 1.1294 and low at 1.1190. The hourly FXStreet OB/OS Index is showing neutral conditions, alongside the FXStreet Trend Index which is slightly bullish.

USD/CAD levels

If the pair extends declines below the 1.1200 level, next supports are at 1.1180, 1.1150 and the 1.1090 area. To the upside, resistances are at 1.1230, 1.1290 and 1.1300.

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