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Bank of Canada Doesn’t Hurry to Increase the Interest Rates

USDCAD pair
USD/CAD

The Bank of Canada has increased the key interest rates twice during this year. The regulator didn’t change the monetary policy at the meeting yesterday. The key interest rate was left at the 1.00% level. Canada’s Central Bank announced that there is no need to increase the rates in the near future. The regulator is going to check how higher rates affect the country’s economy. It has caused the emergence of a bullish sentiment on USD/CAD. CAD has weakened against USD by more than 150 pips.

The positive statistics on the securities yield of the US government supports the US dollar. The U.S. 10-Year Bond Yield is at the level of 2.42-2.43% now.

Several positive reports on the United States economy were published during this week. The indices of business activity in the service and manufacturing sectors grew in October. The volume of durable goods orders was raised by 2.2% during September. This level is higher than the forecasted 1.0% one. Real estate sales raised by 18.9% (to 667.000), while experts were waiting for the index decline by 0.9% (to 555.000).

The chance of raising the key interest rate of the Fed in December 2017 is more than 95% at the moment.

The current technical pattern on USD/CAD

Support levels: 1.27750, 1.27150, 1.26400

Resistance levels: 1,28150, 1.29000

USD/CAD is moving in the range of 1.27750-1.28150 now. The pattern is ambiguous. At the same time, the pair has the growth potential. I advise to open deals in the direction of the current trend. You can buy the pair using a trailing stop in case the price consolidates above the 1.28150 resistance level. USD/CAD may reach the 1.29000 mark.

Another trading option. I don’t exclude a technical correction on this pair in the nearest future. It’s recommended selling USD/CAD after it fixes below the 1.27750 support level. The currency pair can move to 1.27300-1.27150.

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Valentina P

PR Manager at JustForex
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