The Canadian dollar reversed from fresh three-week high at 1.2729 against the US dollar despite downbeat Canada’s April labor data, as US import price index, released at the same time, fell below expectations. Canada’s employment change fell by 1.1K in Apr, strongly undershooting forecast for 17.4K new jobs, while unemployment rate remained unchanged at 5.8% for the third straight month. On the other side, weaker than expected US Import prices which rose by 0.3% in Apr, missing forecast for 0.5% rise, balanced negative impact on loonie from weak jobs data. The pair fell sharply in past two days and retraced over 50% of 1.2527/1.2997 upleg, on strong bearish acceleration after bulls stalled on approach to psychological 1.30 barrier. Negative daily techs maintain downside risk as 20/30/55SMA’s remain in bearish setup, while momentum is trending lower and broke into negative territory, suggesting limited recovery before bears resume. Post-data upticks were capped by broken 20SMA (1.2794), which should ideally keep the upside protected and guard key barriers at 1.2820 zone (former higher base/broken Fibo 38.2% of 1.2527/1.2997 upleg). Bears eye next pivot at 1.2706 (Fibo 61.8% of 1.2527/1.2997 upleg), close below which would generate bearish signal for extension towards daily cloud base (1.2686) and 200SMA (1.2643).
Res: 1.2794; 1.2817; 1.2848; 1.2913
Sup: 1.2762; 1.2729; 1.2706; 1.2686
