The loonie was slightly weaker against US dollar after a batch of data from US and Canada but stays near the highest level in two months.
The USDCAD pair posted new marginally lower low at 1.2541 on Tuesday (the lowest since Feb 19) and shows signs of further weakness.
The pair is holding in a downtrend from 1.3124 (19 Mar peak) and currently riding on the third wave of five-wave cycle from 1.3124, which cracked its FE 123.6% at 1.2559 and eye next significant support at 1.2513 (FE138.2%) and could travel to 1.2440 (FE 161.8%).
Near-term action is holding within narrow congestion between 1.2541 and 1.2623 which extends into the fifth straight session.
Consolidation range is capped by descending 200SMA (1.2624) which weighs along with multiple MA’s bear-crosses and thick daily cloud above, keeping strong bearish bias.
Consolidation may extend before bears resume, with 200SMA/ daily cloud base, expected to cap.
Today’s release of upbeat Canada’s factory sales (1.9% in Feb vs 1.0% f/c) was was offset by stronger than expected US housing data (building permits rose by 2.5% in Mar, heavily beating forecast for 0.7% increase), keeping the pair in directionless near-term mode.
BoC interest rate decision is due tomorrow and will be the next key event for the Canadian dollar.
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