Trading session on Wednesday brought good profit Canadian dollar sellers. During the day the pair USDCAD rebounded from 1.3084 and test resistance 1.32. Despite the fact that to gain a foothold above the buyers failed to rapid growth of the pair shows the full spread, which can develop into a new bullish rally.
The focus of the traders were meeting of the Bank of Canada, which, as expected, kept interest rates unchanged at 1.75%, but left the opportunity to reduce it in the future in order to stimulate the economy and neutralize the negative effects of the global trading uncertainty. The sale of the Canadian dollar after the release of the accompanying statements of the Bank of Canada is a reaction to the fact that the Bank of Canada all began to recognize the negative impact of external threats.
The Bank of Canada noted that the Canadian economy will increasingly be tested for strength in continuing uncertainty and economic growth is likely to slow down due to trade conflicts and the weakness of the power sector. In this regard, GDP forecast for 2020 was lowered from 1.9% to 1.7%, and in 2021 from 2.0% to 1.8%. Thus, a change in the rhetoric of the Canadian regulator has raised expectations of easing monetary policy if economic data deteriorate and the international situation. Market participants believe that the recent comments of the Bank of Canada significantly increased the likelihood of a rate cut in January 2020. Given this, the growth of the pair USDCAD may continue, especially in the resumption of sales in the market of hydrocarbons.
USDCAD BuyLimit 1,3150 TP 1,3370 SL 1,3090
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