“¢ The overnight dovish BoC outlook continues to weigh on the CAD.
“¢ A subdued oil price action does little to lend any support to the Loonie.
“¢ A modest USD pullback seemed to cap gains ahead of the US macro data.
The USD/CAD pair extended its sideways consolidative price action, albeit remained well within the striking distance of the post-BoC spike to near four-month tops.
As was widely expected, the Bank of Canada (BoC), at its April meeting on Wednesday, left interest rates unchanged at 1.75% but abandoned its long-standing bias for higher interest rates. The central bank also slashed its economic growth forecasts and fueled speculation about a possible rate cut this year.
With investors still assessing the BoC’s dovish outlook, a subdued action around crude oil prices failed to lend any support to the commodity-linked currency – Loonie and helped limit the Asian session dip to 1.3485 zone, though bulls lacked any strong conviction amid a modest US Dollar pullback from near two-year tops.
Moving ahead, today’s US economic docket- highlighting the release of durable goods orders data, will now be looked upon for some short-term trading impetus. The key focus, however, will be on Friday’s advance US Q1 GDP report, which might influence the near-term price action ahead of next week’s FOMC meeting.
Technical levels to watch
A sustained move beyond the overnight swing highs, around the 1.3520 region, is likely to accelerate the up-move towards 1.3565-70 supply zone, above which the pair seems all set to surpass the 1.3600 handle and aim towards testing YTD tops, around the 1.3660-65 region. On the flip side, immediate support is pegged near the 1.3475 horizontal zone, which if broken might prompt some long-unwinding trade and drag the pair further towards 1.3430-25 intermediate support en-route the 1.3400 round figure mark.
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