18 Sep 2013
USD/CAD plummets to 1.0201 the low
FXstreet.com (Barcelona) - USD/CAD lost its grip on the 1.0300 handle post the FED and extended its losses on FOMC and Benanke’s dovish rhetoric and forward guidance.
The recent data has been coming in weaker than expected and some participants had predicted a no change to their policy, but overall this has come as a shock to the markets. The Fed is not tapering, worried about tightening conditions and fiscal policies as well. So they want more evidence before they make any adjustments to the pace of tightening. They are not changing any of their thresholds and will take a balance approached with regards to inflation of 2% and the unemployment rate. Markets had been pricing in a dovish tone from the FOMC and between $5B - $15B cut in monthly QE purchases with a renewed emphasis on forward guidance in relation to unemployment thresholds between 6.5% and 6.0% as the FED tries to manage expectations for policy firming.
USD/CAD losses extended
USD/CAD has moved lower below the May ascending supporting line while RSI (14) reads 17.28 and offers and oversold scenario. EMA’s are offering a negative bias for the pair while supports come in at 1.0200, 1.0180 and 1.0110.
The recent data has been coming in weaker than expected and some participants had predicted a no change to their policy, but overall this has come as a shock to the markets. The Fed is not tapering, worried about tightening conditions and fiscal policies as well. So they want more evidence before they make any adjustments to the pace of tightening. They are not changing any of their thresholds and will take a balance approached with regards to inflation of 2% and the unemployment rate. Markets had been pricing in a dovish tone from the FOMC and between $5B - $15B cut in monthly QE purchases with a renewed emphasis on forward guidance in relation to unemployment thresholds between 6.5% and 6.0% as the FED tries to manage expectations for policy firming.
USD/CAD losses extended
USD/CAD has moved lower below the May ascending supporting line while RSI (14) reads 17.28 and offers and oversold scenario. EMA’s are offering a negative bias for the pair while supports come in at 1.0200, 1.0180 and 1.0110.