“¢ Better than expected Canadian GDP provide a strong boost to the CAD.
“¢ The USD remains well bid, albeit fails to gain any traction on softer US data.
The USD/CAD pair finally broke down of its mid-European session consolidation phase and tumbled below the key 1.3000 psychological mark post-US/Canadian data.
The pair extended overnight retracement slide from over three-week tops and came under some intense selling pressure on Friday. The BoC Governor Poloz’s comments, indicating that the central bank will raise interest rates in October helped offset resurgent US Dollar demand and turned out to be one of the key factors exerting downward pressure on the major.
The downfall accelerated further after the monthly Canadian GDP print bettered market expectations and came in to show m/m growth of 0.2% in July as compared to 0.1% expected and last month’s flat reading. Bearish traders seemed to have largely negated a larger than expected fall in the Canadian Raw Materials Price Index, and Industrial Product Price Index.
Meanwhile, a slight disappointment from the US economic data – core PCE price index and personal income figures, though did little to prompt any USD selling, failed to lend any support and stall the pair’s sharp fall to an intraday low level of 1.2971.
The selling pressure now seems to have abated, at least for the time being, with a bullish consolidative action around crude oil prices failing to provide any additional boost to the commodity-linked currency – Loonie and influence the momentum on the last trading day of the week.
Technical levels to watch
Immediate support is now pegged near the 1.2955-50 region, below which the pair is likely to accelerate the fall towards the 1.2900 handle en-route multi-month lows support near the 1.2885 level.
On the flip side, the 1.30 handle might now act as an immediate resistance, above which a bout of short-covering could lift the pair further towards 100-day SMA hurdle, currently near the 1.3055 region.
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