Wednesday did not make any changes to the dynamics of EUR / USD. The trading was closed at the closing price of Tuesday. During the day, the pair declined slightly, but rebounded from the 1.1998 support after the Bank of Canada’s decision to raise the interest rate in 2022 and reduce the volume of the asset purchase program. In addition, the regulator sharply raised the economic forecast for this year, which allowed the “Canadian” to strengthen on the US dollar at once by 174 points.
The intentions of the Bank of Canada to move to tighten monetary policy could be a signal for other central banks.
Following the Canadian, EUR / USD recovered to 1.2045. In order to get to 1.2080, buyers need to break through the 45th degree of the Gann angles at 1.2050. The pair will be supported by further strengthening of the Canadian dollar and lower yields on US Treasuries.
At the same time, the dollar is in demand amid information about the increase in COVID-19 cases in Japan and India. Investors fear new lakdowns, which will again slow down the global economic recovery.
On the technical side, the picture on H1 is favorable for buyers. However, traders may be held back from entering new positions by the upcoming ECB meeting with Christine Lagarde’s press conference. The Fed will meet next week. Investors do not expect any changes in the course of monetary policies of the two main Central Banks, but yesterday’s example of the Bank of Canada may change the mood in the ranks of the Board of Governors.