What happened to the price chart of the USD/CAD currency pair yesterday as the focus turned to the decision of the central bank of Canada policy meeting?
The Bank of Canada (BOC) met the forecast to keep interest rates unchanged at 4.50%, repeating the same move implemented at last March's meeting.
The decision should have weakened the Canadian dollar, but the BOC gave slightly hawkish guidance with the focus on inflation which still needs to come down.
Meanwhile, the US dollar weakened significantly as soon as the United States (US) inflation data was published yesterday with inflation recording the lowest reading since May 2021.
This has pushed the price on the USD/CAD chart to show lower declines until today (Thursday).
If observed, the price initially made an increase to around 1.34800 and also tested the Moving Average 50 (MA50) barrier on the 1-hour time frame on the USD/CAD chart.
Investors assessed the bearish signal when the barrier failed to be broken, the price was pushed back down following the data reaction and the meeting in the New York session yesterday.
After reaching around 1.34300, the decline continued on trading that continued into today's European session towards the support zone at 1.34000.
A lower drop if the zone is crossed would expect the price to reach around 1.33000 to record the latest 8-week low.
However, if the price manages to rise again, breaking through the MA50 barrier will see the price test the concentration zone at 1.35000.
After that, the price that continues to rise will surpass the height reached at the beginning of the week around 1.35500 before going to a higher level.
