THE CANADIAN DOLLAR RALLIES DESPITE THIRD INTEREST RATE HIKE FROM THE BOC
BANK OF CANADA RAISES RATES
The Canadian dollar remained largely unchanged this week, despite the Bank of Canada raising its key lending rate by a quarter point, to 1.25 percent as expected. The USDCAD pair initially fell on the rate hike towards 1.2365 level, but quickly recovered back towards the 1.2520 region, before stabilizing. The rate hike from the BOC marked the third time the benchmark rate has been brought higher since last summer, when Canadian policy makers first began increasing the rate of interest from record low-levels.
The USDCAD pair remains bullish while trading above the 1.2365 level, further upside towards 1.2530 and 1.2650 remains possible.
A loss of the 1.2365 level would likely provoke selling in the USDCAD pair towards the 1.2310 and 1.2250 levels.
The cryptocurrency market experienced a major sell-off this week, as regulators from South Korea and China warned of a crackdown on cryptocurrency exchanges. Bitcoin fell over fifty percent from its all-time high, crashing below the $10,000 level, while Ethereum fell well over twenty five percent, dropping towards the $800 mark. Ripple was also one the many casualties of the sharp decline in the digital currency market, falling to 90 cents, after previously trading as high as $1.60.
BTCUSD remains bearish while trading below the $12,550 level, further losses towards $10,050 and $8,800 appear possible.
A recovery of BTCUSD price above the $12,550 level, should encourage buying towards $13,500 and $14,400 levels.
The British pound moved to its highest trading level against the U.S dollar since the United Kingdom voted for Brexit, with the GBPUSD pair hitting 1.3940. The move higher for sterling was caused by a drop in the value of the greenback, with the U.S dollar index sinking towards the 90.20 level, marking a three-year trading low. The British pound has climbed sharply since the start of the year, with the recent move higher also attributed to rising confidence over a more favorable deal being made between the UK and the European Union.
The GBPUSD pair remains bullish while trading above the 1.3721 level, further upside towards 1.3940 and 1.4030 seems possible.
Should price-action drop below the 1.3721 level on the GBPUSD pair, selling towards 1.3657 and 1.3600 appears likely.
The euro moved to its highest level against the greenback since December 2014, hitting 1.2320, as the U.S dollar index suffered heavy losses. The euro was unable to hold the 1.2300 level or long, quickly falling back towards the 1.2200 level as the U.S dollar index recovered, following the release of the FED's Beige Book. Heavy technical buying in the EURUSD has propelled the pair well over two percent higher since the start of 2018, as the European economic recovery continues to build momentum alongside bullish commentary from ECB policy makers.
The EURUSD pair remains bullish while trading above the 1.2200 level, further upside towards 1.2320 and 1.2400 seems possible.
Should price-action on the EURUSD pair drop below the 1.2200 level, further selling towards 1.2050 and 1.1980 appears likely.