USD/CAD extends reversal from above 1.3000 and eyes 1.2920

Loonie recovers strength after lower-than-expected Canadian jobs data.
USD/CAD extends slide and turns negative for the week.

Matías Salord FXStreet

The USD/CAD pair dropped during the US session to the lowest level in two days. Near the end of the week was hovering around 1.2930, more than a hundred pips below the daily top.

Jobs data from Canada showed that during May employment dropped by 7.5K and the unemployment rate remained at 5.8% and the Capacity Utilization Rate came in at 86.1%. Another report showed that Housing Starts reached 195.6K units. Employment and housing data came in below estimates.

Despite the data, many analysts continue to see a high probability of rate hike from the Bank of Canada in the coming months. Those expectations supported the Loonie in the market.

After rising to test the 1.3040 region, USD/CAD reversed sharply. It bottomed at 1.2928 and it was consolidating daily losses. From the level it had a week ago, was modestly lower.

USD/CAD significant levels

The pair is back into the range of the previous trading days. While to the upside, remains unable to hold above 1.3000, on the downside, 1.2900/1.2920 continues to offer support.

A slide under 1.2900 would expose the 20-day moving average that stands at 1.2890/95: a close below that line could clear the way to more losses.

Author

Matías Salord

FXStreet

Matías started in financial markets in 2008, after graduating in Economics. He was trained in chart analysis and then became an educator. He also studied Journalism. He started writing analyses for specialized websites before joining FXStreet.

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