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Thread: Usd/cad drops as boc underplays recent inflation miss

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    Usd/cad drops as boc underplays recent inflation miss

    1 Attachment(s) Canadian dollar is on a tear after Bank of Canada down-played the current inflation skip. The bank held the interest rate stated the inflation is broadly consistent with all the projections of the bank and unchanged as predicted.

    The bias of the assertion is more towards rate hike as an alternative to the rate cut. This will not come as a shock as background displays the BOC rates have carefully followed that of the Fed.

    Technicals – Risks breaching increasing trend line support

    Support – 1.3380, 1.3343 – 100MA, 1.3292 – 200MA

    Resistance – 1.3485 – 50MA, 1.3535 – Mar 9 large, 1.3581 – 10MA

    Daily chart

    The failure to maintain above 5MA and a subsequent split below 50-MA accompanied by by a fall to 1.3447 indicates the sell-off from the current most of of 1.3639 has resumed.

    The RSI is bearish below 50.00, the accumulation/distribution line also supports the case for further losses.

    I assume the pair to check the increasing trend line support of 1.3380. Losses are to be taken using a pinch of salt, provided near to being over sold at that time, the RSI would be over sold/.

    Plus, the treasury yields could rise in the run-up to June Fed, while a lot also depends on what occurs at the OPEC meeting to-morrow.

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