The USDCAD pair fell to new over four-month low on Wednesday at 1.2248 as loonie benefited from weaker greenback after President Trump’s speech, with positive impact on upbeat US ADP jobs data (234K in Jan vs 186K f/c).
Canadian dollar received additional support from Canada’s solid data on Wednesday as GDP came in line with expectations in Nov (0.4%) but above 0.0% previous month while Industrial Product Price Index (IPPI) and Raw Materials Price Index (RMPI) showed better than expected results in December (IPPI -0.1% vs -0.2% f/c) and (RMPI -0.9% vs -2.2% f/c).
Fresh weakness comes after brief consolidation phase which was capped by falling 10SMA and today’s dip cracked support at 1.2263 (Fibo 76.4% of larger 1.2061/1.2920 ascend) which marks the only significant obstacle on the way to key med-term support and target at 1.2061 (08 Sep low).
Close below 1.2263 is needed for fresh bearish signal for continuation of downtrend from 1.2920 (19 Dec high).
The outcome of Fed’s two-day monetary policy meeting which ends today is in focus as investors are looking for more clues about US central bank’s next steps.
Falling 10SMA marks solid resistance (currently at 1.2378) which is expected to limit upticks and keep immediate bears intact.
Stronger recovery above falling 20SMA (1.2419) would sideline immediate downside risk.
Res: 1.2348; 1.2378; 1.2419; 1.2488
Sup: 1.2263; 1.2248; 1.2195; 1.2118
. ){kind=link}