Market Analysis: A Week of Important News in Full Swing
On Tuesday, Australia's central bank raised interest rates from 3.85% to 4.10%. This is the highest value in 11 years. We wrote about the likelihood of this event in a post dated June 2. Speaking on June 7, bank governor Philip Lowe said: “We have been prepared to be patient [...] but our patience has a limit, and the risks are starting to test these limits,” warning of a possible further rise in rates.
Also yesterday, rates in Canada were raised to 4.75%, a 22-year high. Strong consumer spending, a recovery in demand for services, an increase in housing activity and the situation in the labor market show that excess demand is more stable than expected, the central bank said in a statement. Reuters writes that experts predict another increase next month, aimed at slowing down the overheating economy and stubbornly high inflation.
Technical analysis of USD/CAD today shows that the Canadian dollar has strengthened against the USD after the decision of the Bank of Canada. Note on the USD/CAD chart that since September, the rate has been within the narrowing triangle, and now the chances of its bearish breakout have increased. If this happens, the market could develop an important downtrend after the balance stage (which led to the formation of the mentioned triangle). It is possible that then the activity of the bears can lower the rate to the lower boundary of the long-term channel (shown in blue on the USD/CAD chart).
Get ready for a surge in volatility with the release of the US unemployment news today at 15:30 GMT+3.
Read more: https://fxopen.com/blog/en/oa-market-analysis-a-week-of-important-news-in-full-swing/
Text source: Forex Trading Blog
