The US dollar collapsed against the Canadian dollar during the session on Wednesday as the Bank of Canada raised interest rates, surprising most market participants. We felt towards the 1.2150 level underneath, and I believe now we are going to go looking for the psychologically important 1.20 level. I believe that rallies are to be sold, as the Canadian economy certainly seems to be a lot stronger these days. Ultimately, any signs of hawkishness out of the Bank of Canada will continue to send this market lower. Traders are starting to bet that the Federal Reserve isn’t going to be able to raise interest rates and the short-term, and that should continue to put pressure on this pair.
Written by FX Empire