Slobodan Drvenica
Windsor Brokers
Canadian dollar rallied against its US counterpart on Friday, driven by better than expected Canada’s inflation data (Feb CPI y/y 2.2% vs 2.0% Jan; Core y/y 1.5% vs 1.4% f/c).
At the same time, Canada’s retail sales undershot forecasts (Jan m/m 0.3% vs 1.1% f/c), but without stronger negative impact on fresh bullish sentiment.
Fresh weakness probed again below cracked support at 1.2867 (Fibo 38.2% of 1.2450/1.3124 upleg) and retested Thursday’s spike low at 1.2829, signaling continuation of pullback from 1.3124 (19 Mar high).
Bearish momentum is building as south-heading 14-d momentum broke into negative territory, supporting further weakness.
Break below 20SMA (1.2909) which was cracked on Thursday but bears failed to close below, is bearish signal which will be reconfirmed by close below Fibo 38.2% support at 1.2867, for test of 1.2803 (12 Mar low, reinforced by rising 30SMA) and 1.2787 (50% retracement of 1.2450/1.3124).
Stronger bearish acceleration could travel to 1.2680 zone, where strong support is provided by weekly cloud base and converged weekly 200/20SMA’s.
Also, the pair is on track for strong bearish weekly close which could result in weekly bearish engulfing and generate strong reversal signal, as multi-week rally from 1.2249 (2018 low) shows strong signs of fatigues (weekly RSI turned south and slow stochastic reversed from oversold territory).
Res: 1.2907; 1.2948; 1.2971; 1.3000
Sup: 1.2803; 1.2787; 1.2707; 1.2680
Interested in USDCAD technicals? Check out the key levels
The information contained in this document was obtained from sources believed to be reliable, but its accuracy or completeness cannot be guaranteed. Any opinions expressed herein are in good faith, but are subject to change without notice. No liability accepted whatsoever for any direct or consequential loss arising from the use of this document.
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