• USD/CAD dipped on Wednesday as investors digested Bank of Canada rate decision and U.S. producer prices data.
• The Bank of Canada kept its benchmark interest rate unchanged at 2.25%, as expected, and said growth is likely to strengthen in the second half of the year as inflation pressures ease..
• The Bank of Canada expects the economy to expand at an annualized 2.5% in the second quarter, rebounding from a flat first quarter affected by the Middle East conflict and U.S. trade uncertainty.
•The central bank cut its 2026 growth forecast, citing weaker government spending, while raising its growth projections for 2027 and 2028.
•The U.S. Producer Price Index (PPI) fell 0.3% in June, the biggest monthly decline since April 2025, after a downwardly revised 0.6% increase in May, according to the Labor Department.
• Immediate resistance is located at 1.4117(38.2%fib), any close above will push the pair towards 1.4179(SMA 20).
• Support is seen at 1.4005 (38.2%fib) and break below could take the pair towards 1.3953 (June 12th low).
Recommendation: Good to sell around 1.4060 with stop loss of 1.4100, and target price of 1.3980
