The European Central Bank (ECB) has raised interest rates by 25 basis points, marking its tenth consecutive rate hike since July 2022 and bringing the total increase to 450 basis points. The ECB is primarily concerned about high inflation levels, both current and projected, with concerns extending into the future.
CAD Outlook Ahead of BoC Overnight Rate
2023-06-07 • Updated
Get ready for some suspense as the Bank of Canada faces a tough decision on whether to raise interest rates or keep them on hold. The resilient Canadian economy and the goal of curbing inflation further are at the heart of this dilemma. While some money markets and economists predict another rate hike, others believe the central bank should exercise caution and wait, hinting at a possible increase later in the summer. The Bank of Canada's rate hike spree hit a "conditional pause" in March after eight consecutive increases, bringing the policy rate to 4.5% from the pandemic-era lows of 0.25%. The central bank has been closely monitoring data, waiting for signs of a cooling economy that would help bring inflation back down to its target of two percent, projected to be achieved by 2024. The decision awaits, and it's bound to impact forex markets. Stay tuned for the verdict, and keep your trading strategies nimble.
AUDCAD - Daily Timeframe
Following the rejection from the rally-base-rally demand zone’s confluence with the support trendline, AUDCAD has seen a massive push upwards. There is a high likelihood that the bullish price action continues until the resistance or supply zone area is reached. The supply zone has a few confluences which I expect to yield a good amount of selling pressure. The confluences include;
- Trendline resistance
- 50-Day moving average crossover below 200-Day moving average
- Moving average resistance
- Drop-base-drop supply zone.
GBPCAD - Daily Timeframe
GBPCAD is currently trading within a rising channel and has reached the support trendline of the channel. The trendline support aligns perfectly with the 100-Day moving average support, and the moving averages are all bullish. A drop-base-rally demand zone also serves as a confluence to the factors above, thus, lending more credence to the bullish sentiment.
NZDCAD - Daily Timeframe
NZDCAD looks like it’s prepping for a massive bullish move. This is not a random assumption. The sentiment is based on the current consolidation within the rally-base-rally demand zone and the trendline support of the descending, which fits perfectly within the frame of the demand zone.
EURCAD - Daily Timeframe
In line with the previous analyses, EURCAD also presents a strong bullish case based on the confluence of the drop-base-rally demand zone, the 200-period moving average support, the bullish array of the moving averages, and the trendline support. As a result, my trade sentiment is bullish for the time being.
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