A perfect storm has hit the Canadian dollar today, yet the USD/CAD is hanging tough just above 1.3500. The dovish BoC Interest Rate statement and early-session plunge in WTI crude oil didn’t do much for the Loonie. However, mid-session trade has brought bids to WTI and sellers to the USD/CAD.
At press time (2:00 PM EST), it appears that the USD/CAD is stabilizing near the 1.3510 area. This action comes after the BoC held interest rates static at 1.75% and WTI traded under $57.00 for the first time since 8 March. For the moment, rates have topped out just beneath 1.3550 and have returned to the value area near 1.3500.
78% Fibonacci Resistance Stands Tall
Although it took major heat on the BoC Interest Rate Statement, the macro 78% Fibonacci retracement level is standing tall.
Overview: In a Live Market Update from yesterday, I outlined a short trading plan from a macro 78% Fibonacci resistance level. If you missed it, check it out here. Thus far, the trade has performed well, producing a maximum profit of +22 pips. A move beneath 1.3500 is becoming more likely as WTI has rallied above $59.00.
WTI crude oil has rebounded quickly from the early session sell-off and is showing strength. Going into the Thursday session, there is an extremely good chance that rates will return to the value area between 1.3500 and 1.3450.