Canadian dollar surged to the highest since June 2015 against its US counterpart after Bank of Canada decided to hike interest rates by additional 25 bps to 1% (BoC hike rates in July by 0.25% for the first time in seven years).
The USDCAD pair crashed after the decision, falling some 270 pips to fresh over two-year low at 1.2133.
The central bank’s action was seen unlikely, according to the latest polls that showed 22% possibility of changing interest rates on today’s meeting. Subsequent bounce on profit-taking after strong fall regained levels above 1.2200 handle but limited corrective action is seen before bears resume towards next targets at 1.2046 (50% of 2011/2016 0.9405/1.4688 ascend) and psychological 1.2000 level.
The pair is on track for strong bearish daily close which will mark the fifth straight close in red that is expected to weigh on the action in coming sessions.
Res: 1.2250; 1.2300; 1.2335; 1.2370
Sup: 1.2133; 1.2100; 1.2046; 1.2000
