The U.S. dollar fell to session lows against the Canadian dollar on Wednesday after the Bank of Canada struck a more hawkish tone on the economic recovery after leaving interest rates on hold. Hawkish tone is known to be good for a currency and a dovish tone is known to be bad for a currency. The loonie, as the Canadian dollar is also known, was boosted after the BoC noted that exports had surged in the second quarter after a weaker winter, bolstered by stronger U.S. investment spending and the depreciation in the domestic dollar. The bank added that activity in the housing market has been stronger than anticipated. The central bank left its overnight rate unchanged at 1.00%, saying that the risks to the outlook for inflation remain roughly balanced, while the risks associated with household imbalances have not diminished.
Intra-day bias remains on the downside with 21 and 55 EMA trend indicators crossed southwards. Furthermore, SSRC, Stochastic, RSI and MACD oscillator indicator are also showing bearish momentum is intact. Price is currently trading below the weekly central pivot point and a break of 1.08696 supports should bring more decline to 1.07918 (Weekly S1).
Important fundamental reports to watch out for is the USD Trade Balance, CAD Trade Balance, USD ADP Non Farm Employment Change.