Daily outlook - USD/CAD down 1.09%
- The USD/CAD currency exchange rate had a quite turbulent Wednesday, as the Greenback depreciated against the Loonie by 1.09% and, in the result, broke through the southern boundaries of a medium-term and short-term channels.
- To a large extent the downfall was caused by disappointing news coming from both the White House and Census Bureau.
- After finding support below the weekly S1 at 1.2625, the currency pair started a gradual recovery.
- Most likely, today traders will try to push the price back to the 1.2711 mark that represents a point, from which the drop has initially started.
- On the one hand, market sentiment has not practically changed since yesterday and remains 71% bullish.
- On the other hand, a summary of technical indicators for the 5H and 1D timeframes send clear sell signals.
In line with expectations, the currency exchange rate tried to rise towards the 1.2711 mark that represents a point from which its Wednesday downfall has started. Nevertheless, this attempt was neutralized by a combined resistance level formed by the weekly PP at 1.2689 as well as the 55-, 100- and 200-hour SMAs. Accordingly, the first half of Friday the pair spent in a steady decline back towards the monthly PP at 1.2636.
Fortunately for the Loonie, an announcement of the Canadian CPI that matched with the experts’ forecasts has only accelerated the fall and drove the rate down by 71 basis points. Most probably, the drop is going to continue by inertia at least until the weekly S2 at 1.2566.
But as soon as markets will calm down, the buck is going to try to restore some of the lost positions and return the pair back to the 1.2657 level.