- Loonie gains momentum across the board after Bank of Canada business outlook survey.
- USD/CAD drops more than 80 pips from daily highs to lowest since Wednesday.
The USD/CAD pair peaked at 1.3050 before turning sharply to the downside. Recently bottomed at 1.2965, a 5-day low. As of writing, it was trading at the lows with the bearish tone intact and no signals of a rebound.
The move lower was triggered by the Bank of Canada Business Outlook survey. Rate hike expectations rose after the report. Next week, the central bank is expected to deliver a hike and market participants also see a potential for another hike in December or January.
The loonie reversed sharply against the US dollar, breaking a 2-day consolidation range. Earlier today, USD/CAD remained within 1.3000-1.3050 despite weaker-than-expected US retail sales data. The breakout took place after the BoC survey.
USD/CAD Levels to watch
The short-term technical outlook turned bearish with the recent slide that follows a rejection from levels above 1.3050 last week.
To the downside, the immediate support is seen at 1.2950, followed by 1.2925 (last week low) and 1.2885. On the upside, resistance might be located at 1.3000 (Oct 9 high / Oct 12 low), 1.3030 and 1.3050 (Oct 12, 15 high).
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