The Bank of Canada yesterday announced that it is maintaining its target for the overnight rate at 1%. In Canada, economic growth in the fourth quarter of 2013 was slightly stronger than the bank estimated. Exports have been a little stronger than previously thought. The Monetary Policy Report says that both total CPI and core inflation are still expected to follow roughly the path outlined in January. The fundamental drivers of growth and inflation in Canada continue to strengthen gradually.

In the US dollar front, the US service sector data was below expectations. The institute for Supply Management yesterday said that its service sector index fell to 51.6 from 54 in January. The US service companies expanded more slowly in February as hiring level declined in a cautionary indication for the economy coming out of winter. Many recent economic indicators have pointed to weakening momentum. The greenback traded lower during yesterday's trading session.

Technical view

The USD/CAD pair is trading at the level 1.1039 in Asia's trading session. Yesterday, the pair broke and closed below the supported trend line. From October 2013 onwards, the pair has a habit of holding the 21DEMA. In February 2014, it closed below the 21DEMA for the first time, but held 40DEMA and moved higher. Again yesterday, the pair closed below the 21DEMA and today opened and statred trading below it. The 40DEMA stood at 1.09965 and 50SMA was at 1.09752. We expect the price to stop at these two levels. A daily close below 1.09752 makes more weakness in the daily chart. The price is seen to move to lower levels towards 1.1019, 1.0843,1.0761, and 1.06122.

POSITIONAL: CLOSE BELOW 1.0975, BEAR ATTACK

S1 1.0996 R1 1.1052

S2 1.0975 R2 1.1195

S3 1.0761 R3 1.0761

In the daily chart, oscillators are giving a sell signal. Whereas, in the hourly chart, the RSI is in the oversold zone giving a buy signal. We could expect the price to pull back from cmp. In the H4 chart, the price is holding above the 200EMA.

INTRADAY: BUY WITH SL 1.1019. SELL BELOW 1.1019. The price will move up above 1.1041.

S1 1.1025 R1 1.1063

S2 1.1019 R2 1.1077

S3 1.1 R3 1.1098