Global macro overview for 08/09/2016:
As anticipated, yesterday the Bank of Canada kept its interest rates unchanged. The key overnight interest rate was left at 0.50% for the 14th consecutive month. According to the Bank, the overall balance of risks remained at the level for which the current monetary policy seemed appropriate. Moreover, oil production in Canada rebounded, damaged by the Alberta wildfires earlier this year, and the Canada Child Benefit rose. It was also admitted that the world economic growth is picking up at a slower pace than expected, missing latest economic forecasts. In conclusion, a widely expected BoC behavior and rather neutral Carney speech did not really give investors any certain conclusions towards the further monetary policy. It looks like the Bank has adopted a wait-and-see approach and seems to be waiting for the Fed meeting in September before making any long-term strategic changes to its monetary policy.
Let us now take a look at the GBP/CAD technical picture at the daily time frame after the data release. The initial rally was capped very soon and bears did not give any chance to bulls to test the golden trend line. The daily candle is a down candle that sits just above the important technical support at the level of 1.7160. Any break put below this level is clearly bearish. The next support is seen at he level of 1.6685.
