The USDCAD has moved below support at the 1.0325 level on the news.
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Greg,
I trade AUDCAD, generally audcad goes similar directions as audusd. RBA raised interest rate yesterday, and AUD has risen against most currencies. BOC kept rates same this a.m. and CAD has strenghtened against most currencies. But Audcad has fallen so wondering why is CAD strenghtening over AUD when AUD seems to be stronger against most other crosses? Is CAD just more bullish than AUD is bullish? Fundamental or technicals that are causing this?
The market can tend to be more forward looking. From a fundamental perspective, perhaps the thought that Canada is getting closer to the tightening takes the yield differential advantage away from the AUD away. That is RBA has been raising rates and Canada been keeping unchanges. SO AUDCAD has been rising as a result. Now, when the time comes for CAD to start raising (they say June-ish) then both will likely be raising (or maybe RBA will be near there target level of 4.5%). So now advantage may swing toward CAD. In other words, it is not today but tomorrow the market is concerned with —- today. Looking at the chart you can see a topping in the currency. Below the 100 day MA, testing the 200 day MA. If you were to rank countries that might tighten next… US? Not any time soon it seems. UK? Nope. EU? Nope. Japan? Nope. Swiss? Maybe but they aleady are worried about their currency being too strong as a result of a flight to quality. Canada? Well “rates will stay on hold until June” That may be the closest of the major economic countries. So there is a fundamental explanation for you …..
I hope this helps
Greg