- The Bank of Canada overnight, left unchanged the repo rate at 1.00%, reinforcing market expectations of a disappointing neutral stance.
- The central bank noted slack in the labour market should allow further growth without extra inflation and also said that it will remain ‘cautious’ regarding further tightening.
- CAD slumped across the board as market rules out further BOC rate hikes in Dec/Jan.
- EUR/CAD spiked past the 1.51 handle to hit 20-week highs at 1.5137, bias higher.
- The pair has shown a 'Symmetric Triangle' breakout which raises scope for further gains.
- Technical indicators are bullish. RSI and Stochs are biased higher, MACD is on verge of bullish crossover.
- Immediate resistance lies at 61.8% Fib retrace of 1.61051 to 1.37839 fall at 1.5218. While immediate support lies at 1.50.
- Focus now on the European Central Bank (ECB) policy meet. Markets expect the ECB to begin tapering its EUR 2.3 trillion stimulus program today.
Call update: Our previous call (http://www.econotimes.com/FxWirePro-EUR-CAD-upside-pauses-at-618-Fib-bias-higher-good-to-go-long-on-break-above-969200) has hit all targets.
Recommendation: Book partial profits. Trail stop loss to 1.50, hold for 1.52/ 1.5218/ 1.5280/ 1.53.
FxWirePro Currency Strength Index: FxWirePro's Hourly EUR Spot Index was at 55.788 (Neutral), while Hourly CAD Spot Index was at -71.3428 (Neutral) at 0440 GMT. For more details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex.
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