USDCAD Outlook:Loonie falls on weak Canadian data, strong greenback and oil price fall

Slobodan Drvenica Windsor Brokers

USDCAD

The USDCAD pair rose to new five-week high at 1.3119 on Friday, on nearly 100-pip jump after disappointing data from Canada.
Canadian CPI m/m fell 0.4% in Sep vs -0.1% f/c, while annualized figure was 2.2% in Sep, falling below 2.7% f/c and 2.8% previous month.
Canada’s retail sales also disappointed (Aug m/m -0.1% vs 0.3% f/c / Core Aug m/m -0.4% vs 0.2% f/c).
Negative data added to loonie’s existing bearish outlook, driven by stronger greenback across the board and strong fall in US oil price.
Fresh bullish acceleration broke above thin daily cloud (spanned between 1.3078 and 1.3088) and came ticks ahead of next barrier at 1.3121 (Fibo 76.4% of 1.3226/1.2782, adding to bullish signals on Thursday’s close above pivotal barriers at 1.3056/65 (Fibo 61.8% of 1.3226/1.2782 / 100SMA).
Daily MA’s are in positive setup and along with rising bullish momentum, underpin the advance.
Friday’s close above broken 1.3056/65 barriers is needed to confirm bullish stance on completion of inverse H&S pattern on daily chart for further upside, as the pair is on track for the third straight bullish weekly close.
This is also needed to complete inverse H&S pattern on daily chart and open way towards key barrier at 1.3226 (06 Sep high).
Bears could be delayed on weekly close below 1.3056/65 (Fibo / 100SMA), now acting as support.

Res: 1.3121; 1.3174; 1.3197; 1.3226
Sup: 1.3065; 1.3056; 1.3027; 1.3014

Author

Slobodan Drvenica

Windsor Brokers

Industry veteran with over 22 years’ experience, Slobodan Drvenica joined Windsor Brokers in 1995 when he was an active trader for more than 10 years, managing the trading desk and own account departments.

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