BOC to renew inflation targeting agreement
There was thought the inflation target might be raised on concerns that the recovery was not as strong and therefore having a higher target would allow the BOC to keep rates lower for longer. That does not seem to be the case. So the CAD has gotten a touch stronger on the status quo news.
Technically, the price for the pair has been stepping higher in trading today. The 1st leg the price up to 1.2197, corrected around 50% and started the next leg (from 1.2161 to 1.2249). The comments pushed the price down today 38.2% retracement of that leg higher at the 1.2215 level. Holding that level, keeps the bulls somewhat in in control. However, the quick decline, may have taken the steam out of the move higher at the same time?
Taking a broader look at the daily chart, the view is still not bullish. The move higher since bottoming last week, has seen the price extend from 1.1918 to the high today at 1.2249. The 38.2% of the move down from the March high comes in at 1.2268. That level and the 100 day MA (blue line in the chart below) remain key upside hurdles that still need to be broken. So although the bulls have been winning the battles over the last few days, there may be some cause for pause at the resistance levels.
