USD/CAD has slipped back below 1.2750 and into the 1.2730s with the loonie performing well amid perky crude oil prices. The pair seems to be consolidating within a pennant and a downside break could trigger a move below 1.2700. USD/CAD has been trading with a downside bias in recent trade and the pair has dropped below the 1.2750 level into the 1.2730s, a decent reversal from Monday’s highs around 1.2790. A pick up in sentiment in US equity and crude oil markets seems to be helping the loonie, whilst Canadian Housing Starts (Nov) and Manufacturing Sales (Oct) data was largely ignored. Canadian data plays second fiddle, but loonie traders likely to keep an eye on Macklem Canadian Housing Starts data was released at 13:15GMT and rose to 246K in November from 215K in October (expected was 215K). Tuesday’s housing numbers show that the Housing sector of the Canadian economy remains remarkably robust in the face of this year’s pandemic. Housing starts did drop to more than 10-year lows at 150K in April at the height of Covid-19 lockdowns, but a monthly reading of 246K puts November in the top five best months for housing starts in the past five years. Shortly after, Manufacturing Sales data for October was released at 13:30GMT and was a disappointment; the MoM rate of sales growth slowed markedly from 1.5% in September to just 0.3% in October, below expectations for an increase of 0.6%. Concerningly, Factory New Orders (seen as a leading indicator for where manufacturing sales will go in the months ahead) dropped 3.9% on the month down from a 4.3% increase in September. Whilst both of these data points were largely ignored by a loonie which seems more intent on trading as a function of what is happening in crude oil markets and regarding US dollar sentiment, loonie traders are more likely to pay some attention to a speech later on this Tuesday by Bank of Canada Governor Tiff Macklem. Last week, BoC Deputy Governor Beaudry made some interesting comments, in which he outlined that the bank could cut rates further without going into negative territory if the economy went into a persistent downturn, before adding that other easing options included expanding its QE programme or employing yield-curve targeting. Moreover, in the Q&A following his initial speech, Beaudry was pressed on whether the bank is actively considering lowering rates, to which he replied that though nothing has been decided yet, this is a potential option and the bank is thinking about it. Beaudry was also asked during the Q&A about how concerned he is regarding the strength of CAD. He replied that the exchange rate is very important for the outlook and that CAD strength is one element that the BoC is looking at when it puts together its January MPR. Net-net, despite the lack of any negative reaction in CAD at the time, Beaudry did seem to open the door to further BoC easing in January which, by the sounds of it, might motivating at curbing recent CAD strength. If not, why would he make further easing the main topic of his speech? Traders will be on notice for any comments regarding the prospect of further rate cuts or on CAD valuation from the BoC Governor himself when he speaks at 19:30GMT. USD/CAD consolidates within medium-term pennant USD/CAD is currently consolidating within a medium-term pennant that is constrained by a downwards trend line linking the 2 December lows and 9 and 14 December highs, and supported by an uptrend linking the 10 and 14 December lows. A downside break of this trendline would likely open the door to a move towards fresh multi-year lows and the psychological 1.2700 level, what an upside break could see a move back to weekly highs in the 1.2790s and perhaps back above the 1.2800 level. USD/CAD one hour chart FX Street FX Street FXStreet is the leading independent portal dedicated to the Foreign Exchange (Forex) market. It was launched in 2000 and the portal has always been proud of their unyielding commitment to provide objective and unbiased information, to enable their users to take better and more confident decisions. View All Post By FX Street FXStreet News share Read Next Brexit News: Irish PM Martin expresses optimism, GBP/USD hits 1.34 FX Street 2 years USD/CAD has slipped back below 1.2750 and into the 1.2730s with the loonie performing well amid perky crude oil prices. The pair seems to be consolidating within a pennant and a downside break could trigger a move below 1.2700. USD/CAD has been trading with a downside bias in recent trade and the pair has dropped below the 1.2750 level into the 1.2730s, a decent reversal from Monday’s highs around 1.2790. 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