The Bank of Canada Rate Decision: Loonie Tumbles on the Comments

The Canadian dollar touched the lowest level since Oct. 9 after policy makers said in a statement its strength will “more than fully offset” recent signs of economic growth in the nation. (Source: Bloomberg.com)

Bank of Canada Cut Rate; 65 pips Profit Made

Selling CADJPY made 65 pips profit.
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BoC rate decision had everything, but profit!

Bank of Canada keeps rate unchanged, concern on inflation is said as the reason. A 0.25 percent rate cut was expected. A better than expected Merchandise Trade was another boost for the currency's appreciation.

Before the announcement, CAD was weaker against some currencies, such as USD, AUD, and NZD.

I think the effects of recent speeches from the US officials made the scene so cloudy that I was unable to detect possible signals from the charts, so I had no position today.

BoC's surprise is a good case showing why I don't want to bet on a data itself.

I study this case carefully. I think many lessons, especially from the technical aspects, can be learned from this cloudy day. I am sure I would use the experience in other cases, as I do it before.

Is the BoC rate decision fully priced?

I am ready to go short on CAD, but technically I can't see any strong supportive data. Canadian dollar has been depreciated last week against almost all majors. So I am going to believe that it has been fully priced, maybe when I was watching TV!

Canada's interest rate cut, hope to be my best play

In a short term, I don't see any possibility for a significant jump in oil price. However it doesn't worry me because even a 138 $/b seems to be unable to support the CAD.

When we must wait until Tuesday for the interest rate meeting, it would be a comfortable time because there is not any other scheduled supportive data, not from Canada nor US.

I will go long on pairs such as AUDCAD or even NZDCAD, but I think the best entry point will appear on Monday's night.