FUNDAMENTAL ANALYSIS
The Canadian dollar rallied back gain after the Bank of Canada signalled its intention to start withdrawing economical stimulus in the second quarter.
Although the BOC decided to keep the overnight rate unchanged at .25% as expected, its new remarks represent a notable shift ever since the start of the economical crisis. The Bank finally considers Canada’s economy is ready for a change in monetary policy.
The BOC is likely to start raising its interest rate, probably as soon as June.
The Canadian dollar is likely to remain below parity for some time. A push to as high as .9500 against the dollar on rate hikes is possible by year-end.
TECHNICAL ANALYSIS
The 4-hour chart shows a total reversal of last week's up move. The momentum seems strong enough to push the pair down to .9900 or even .9800 in the next few days.
Resistance levels:
- 1.0000
- 1.0100
Support levels:
- 0.9900
- 0.9800
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