Head of Bank of Canada McLem: Policy has an impact on the financial system:
A strong Bank of Canada response to the pandemic was necessary, but now the economy and the financial system will be more exposed to different shocks;
It is clear that after the pandemic the level of public debt will increase;
Companies and pension funds will have to adjust to low rates;
The Bank of Canada will continue to assess the risks that credit losses may become high enough for banks to have to tighten lending terms;
A full recovery will take time, and there are many risks associated with it;
Key commodity sectors face challenges; the longer the recovery, the higher the risk that cash flow problems may turn into solvency problems.
Our Analysis:
Provided that the currency pair is traded below 1.3220, follow the recommendations below:
- Time frame: 30 min
- Recommendation: short position
- Entry point: 1.3185
- Take Profit 1: 1.3140
- Take Profit 2: 1.3120
Alternative scenario:
In case of breakout of the level 1.3220, follow the recommendations below:
- Time frame: 30 min
- Recommendation: long position
- Entry point: 1.3220
- Take Profit 1: 1.3250
- Take Profit 2: 1.3275
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