- The pair extended overnight post-BoC pullback amid the prevalent USD bearish bias.
- A follow-through pickup in Oil prices underpin Loonie and add to the selling pressure.
- The focus now shifts to the US consumer inflation figures, due later this Thursday.
The USD/CAD pair dropped to fresh weekly lows in the last hour and has now moved within the striking distance of eight-month through set last week.
After a sudden spike in reaction to the BoC announcement on Wednesday, the pair witnessed some aggressive selling at higher levels and snapped three consecutive days of winning streak in the wake of a sharp US Dollar downturn.
It is worth reporting that the BoC refrained from hinting at the next policy move in its statement, rather made it clear that it has no intentions to match potential interest rate cuts from the Fed and helped the Canadian Dollar to regain traction.
Meanwhile, the greenback came under some heavy selling pressure after the Fed Chair Jerome Powell’s remarks and the June FOMC meeting minutes confirmed the US central bank’s dovish bias, reaffirming a 25 bps rate cut at the upcoming meeting on July 30-31.
The USD bearish pressure remained unabated amid the ongoing slide in the US Treasury bond yields, which coupled with a follow-through bullish move in Crude Oil prices underpinned the commodity-linked currency – Loonie and kept exerting downward pressure on the major.
It would now be interesting to see if the pair is able to find any buying interest at lower levels or breaks through the recent swing low to confirm a fresh bearish breakdown as the focus now shifts to Thursday’s important release of the US consumer inflation figures for June.
Technical levels to watch