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Corrective Pullback


Risk-On Carries On


Late Trade, March Calls


Bounces Off Key Support

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  • A more hawkish than expected BOC statement prompted a strong immediate rally in the Canadian dollar. USDCAD had been in positive territory throughout early trade on Wednesday due to declining oil prices, however, appeared offered approaching the decision, trading from 1.2420 down to 1.2400.
  • Following the release, the pair traded quickly down to 1.2340 and remained under short-term pressure as it traded down to 1.2301 lows in the aftermath. Cad gains consolidated throughout the US trading session with USDCAD content around 1.2340.
  • Technically, the focus turns to the mid-October lows now well in range at 1.2288, with 1.2253 the most significant support of note, the June 23rd low.
  • Elsewhere, GBP was under pressure as Chancellor Sunak announced details on the UK budget. Cable traded down to lows of 1.3710 but has since bounced back to 1.3750. EURGBP had a strong relief rally after holding above 0.8400 yesterday, to highs of 0.8465.
  • A poorer day for the commodity complex did little to stifle the bid in AUDUSD and NZDUSD, which continue to both consolidate above the September highs.
  • USDJPY, however, did suffer and made a new marginal low for October at 113.39 before bouncing into the close.
  • EURCHF continues its steady retreat, edging below 1.0650 for the first time since July 2020. While the price action remains very slow, this may be worth monitoring if we start to approach lows at 1.0607 and the 2020 lows close to the 1.05 handle.
  • Overnight, markets will await the Bank of Japan before German CPI data. Later on Thursday, the focus will turn to the ECB statement/press conference and the advance reading of US Q3 GDP.