The USD/CAD is trading lower this Tuesday but has pared some of its earlier session losses. The US Dollar Index had dropped off its recent highs, and crude oil prices had also shown some upside on the day. These situations supported the Loonie, which is why the upside seen on the USD/CAD was truncated.
However, recent data from the US has allowed the bulls to push off the intraday support level. Core Durable Goods Orders (monthly) remained stagnant, showing a 0.2% growth. The market consensus was for 0.3% growth. This was offset by a slump in the headline number, showing a lower-than-expected print (-0.2% versus consensus of 0.1% and previous of -0.1%).
The support for the pair came from the Consumer Confidence report, which showed an increase from 103.2 to 108.0. The consensus was for the growth of the index to 1040.0. Other fundamental triggers for the USD/CAD come from both sides of the border.
On Thursday, 29 September, the Canadian GDP (monthly) will be released, with the markets expecting a contraction from 0.1% to -0.1%. Other news come from the US, including the Fed’s inflation barometer (Core PCE Price Index) and a series of speeches from members of the Fed’s governing board, led by Chairman Jerome Powell.
The intraday boun e on the 1.36621 support could enable the bulls to make a fash to retest the recent high at the 1.37745 price mark. Above this level, the 1.38767 resistance level (16 April 2020 and 20 May 2020 lows) forms the next upside target, while the 1.40131 price mark forms a new upside mark, being the site of the former highs of 16 March 2020/15 May 2020. The 1.41581 resistance is an additional harvest point for the bulls if the advance continues.
On the flip side, the bears need to force a breakdown of the 1.36621 support to continue the correction. This corrective decline targets the 1.35977 support (21 July 2020 low). If the bulls fail to defend this price mark, the bears would have a free one toward the 1.35117 support (25 April 2019 and 15 July 2020 lows). The 1.33756 price mark forms an additional harvest point for the bears, leaving the 14 July and 7 September highs at 1.32109 in the running as a potential target to the south.
This post was last modified on Sep 27, 2022, 16:12 BST 16:12