USD/CAD attacks 1.2400 once again as USD selling extends
|- DXY keeps falling
- Fails to benefit from weaker oil prices
- Canadian manufacturing sales and US consumer sentiment eyed.
The recovery in USD/CAD ran out of legs just ahead of the daily pivot of 1.2433, now pushing the rates to test the key support at 1.2400 levels ahead of the macro releases due out from both NA economies.
USD/CAD: Vulnerable below 1.2400
The spot extends its bearish momentum into a second day today, almost 150-pips down from its post-BOC rate hike announcement, mainly driven by persisting broad-based US dollar weakness amid monetary policy convergence between the Fed and global central banks, especially after the BOC hiked the rates by 25bps at its policy meeting held earlier this month. The USD index is on track to hit fresh three-year lows at 89.98, now losing -0.28% on the day.
Meanwhile, the latest upmove seen in Treasury yields combined with the sell-off in oil prices also failed to offer any respite to the major, as the bears now target the 1.2353 Dec 2017 low below a break of the 1.2400 barrier, with the expected rebound in the Canadian manufacturing sales likely to exert further downward pressure on prices.
USD/CAD Technical View
The immediate support for the pair aligns at 1.2400 (daily low) ahead of 1.2377 (Jan 8 low) and 1.2353 (Dec 2017 low). On the upside, resistances could be seen at 1.2433/36 (daily pivot & top), 1.2457 (10-DMA) and 1.2500 (round figure).
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