Global macro overview for 03/03/2017:
The Bank of Canada left its key interest rate unchanged at the level of 0.5% at its policy meeting on Wednesday. Despite the fact, that BoC acknowledged that the economy probably expanded at a stronger-than-expected pace in the final quarter of 2016, BoC decided not to stimulate the economy for now. The BoC justify, that the economy remained below its production capacity and inflation growth was driven mostly by temporary factors and it will continue to monitor the risks outlined at its January policy meeting. In conclusion, the biggest source of uncertainty for the Canadian economy is now the Trump policies towards Canada. So far no special changes have been made by Trump, but as we remember from his presidential campaign, he promised to "tweak" the relationship between the US and Canada.
Let's now take a look at the USD/CAD technical picture at the H4 time frame. The technical resistance at the level of 1.3388 had been violated, and now the price is heading higher towards the next technical resistance at the level of 1.3460 in overbought market conditions. It is quite possible, that the corrective cycle is just around the corner and the growing bearish divergence between the price and the momentum oscillator supports this view.
