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USD/CAD hammered to sub-1.1200 levels

FXStreet (Edinburgh) - The Canadian dollar hit a fresh 1-week high vs. the US dollar on Wednesday, dragging USD/CAD to levels last seen in October 13th.

USD/CAD weaker on BoC

The Loonie managed to pick up pace after the less dovish tone from the BoC in today’s meeting. After worrisome results from the retail sales in Canada, the pair jumped from the 1.1215/20 area to the vicinity of 1.1300 the figure. However, the tone from Governor Poloz caught markets off-guard, reigniting the demand for CAD. Amongst the salient points, the central bank dropped its neutral stance regarding the timing of any change in the monetary policy and revised up its forecasts for the inflation in the upcoming periods. In the view of Shaun Osborne, Chief FX Strategist at TD Securities, “A sustained break higher puts USDCAD on track to repeat the scale of the 1.1074/1.1384 move up seen earlier in October from the 1.1260 break out point—targeting 1.1560. Short-term trend momentum is lacking at the moment but should pick up in the event of a sustained rise today”.

USD/CAD levels to consider

At the moment the pair is down 0.02% at 1.1218 and a breakdown of 1.1190 (low Oct.14) would open the door to 1.1168 (low Oct.13) and finally 1.1160 (low Oct.10). On the upside, the next hurdle aligns at 1.1297 (high Oct.21) ahead of 1.1360 (high Oct.16) and then 1.1385 (2014 high Oct.15).

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