- Canadian dollar recovered slightly from the one month low of 1.25383 made yesterday after a slight positive comments from BOC deputy governor Sylvain Leduc. He mentioned that Canada economy is expected to show a minor decline in next quarter but not continue to exceed rate of potential output. The pair declined till 1.24571 and is currently trading around 1.24735.
- The central bank raised interest rates twice this year but further rate hike is not possible this year because economy is expected to slow in Q3. Canada’s economy grown at 4.5% in Q2 compared to analyst forecast of 3.7% due to improvement in household spending and exports. But analysts predict Q3 GDP will grow somewhere between 2% to 3%.
- WTI crude oil prices declined sharply after hitting high of $52.83 on Sep 28th 2017 on oversupply concerns. US oil dipped till $49.89 and market awaits US crude inventories for direction. Oil prices declined yesterday after US API report shows large build up in gasoline.
- On the higher side, near term resistance is around 1.2530 (55- day EMA) and any convincing close above will take the pair to next level till 1.2600/1.266 (Aug 31st 2017 high).
- The near term support is around 1.2417 (34- day EMA) and any break below will drag the pair down till 1.23600/1.23000.
It is good to buy on dips around 1.2450 with SL around 1.2390 for the TP of 1.2600/1.2660.