Loonie gained support cause of weak Dollar and commodity price recovery.
From the year high 1.3450, U/C fell more than 500 pips and found support at 1.2970
The sell-off could be explained due to profit taken.
The "selll-off" continues or not depend mainly on data tomprrow.
If data is positive,U/C found support and begin to "Buy in dip'.
If data is neagtive, U/C continues the downtrend and likely fall to 1.2860
Indeed, I check the performance of Canada data last month, there were more negative data than positive data.
- New Housing Price
- Wholesale Sales
- RBC PMI
- Retail Sales
- Ivey PMI
All above factors could contribute to weak data.
If I were right, the current level is a chance to buy in dip.
However, everything could happen.
I think U/C should trade lower to 38% Fib Retracement level.
U/C now stops at the lower edge of Kumo cloud and found support at there.
While it also moved below 23.6% Fib retracement level, potential signal for move lower to38% Fib retracement level.
SMA50 + 50 are broken.
All signals favor the downtrend.
I think the more strong support is at SMA100, this is a good level to rebuy USDCAD .
However, we should wait after the report, I encourage waiting the report than hit a trade currently.