USD/CAD erases weekly gains, eyes October lows
|The Loonie rose further against the US dollar during the American session and dropped back to the level it closed last week. A retreat of the greenback and a recovery of the Canadian dollar pushed USD/CAD to the downside.
The pair was hovering above 1.2520 and turned to the downside after the release of US and Canadian economic data. US housing data came in below expectations while in Canada, Manufacturing sales jumped 1.6% above the 1.0% expected. The loonie gained momentum and pushed USD/CAD back below 1.2500. Friday will be the key day for Canadian data with the release of August’s retail sales and September’s CPI.
Canada: Manufacturing sales increased 1.6% to $53.5 billion in August
US Housing Starts: Storm-induced volatility likely to continue - Wells Fargo
The pair slid further and bottomed at 1.2462, the lowest since Monday. It has completed an important reversal after falling more than a hundred pips from yesterday’s highs. USD/CAD now appears to be headed toward a test of October lows located at 1.2430. It remained near at the lows after the released of the Fed’s Beige Book with the Loonie consolidating gains across the board.
Fed's Beige Book: Price pressures remained modest
Technical levels
To the downside, below day’s low supports might be located at 1.2450 (Oct 13 low), 1.2430 (Oct low) and 1.2400. On the flip side, the immediate resistance is now seen at 1.2500, followed by 1.2530/35 (Oct 18 high) and 1.2560 (Oct 9 & 16 high).
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