USDCAD Outlook: Loonie Rallies after BoC Raised Interest Rates and Signaled Further Hikes

The USD CAD dipped below 1.30 support in over a hundred-pips fall after Bank of Canada raised interest rates by25 basis points to 1.75%, in line with expectations. The BoC also said that more rate hikes would be needed to keep the inflation in check, which inflated Canadian dollar to the highest level against its US counterpart in one week. Reversal pattern is forming on a daily chart after triple upside rejection above 1.31 barrier, with today’s weakness expected to complete the pattern and signal further downside. Violation of key 1.30 support zone (psychological support/double Fibo – 38.2% of 1.2782/1.3132/61.8% of 1.2916/1.3132), could generate stronger bearish signal on daily close below here, for extension through converged 20/30 SMA’s (1.2983/79) and possible acceleration towards next key support at 1.2915 (16 Aug trough, reinforced by rising 200SMA/Fibo 61.8% of 1.2782/1.3132). Daily indicators are heading south after forming bear-crosses and support scenario, as falling daily cloud is thickening and maintaining pressure. Loonie-supportive fundamentals following hawkish BoC, add to the sentiment. Read more forex news…

Res: 1.3000; 1.3020; 1.3036; 1.3069
Sup: 1.2979; 1.2957; 1.2915; 1.2884

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