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For a second straight week, the Canadian dollar dropped 200 points against the US currency, with  USD/CAD  closing at 1.3540.  This marked the pair’s highest weekly close since mid-February. There are no Canadian events this week.  Here is an outlook on the major market-movers and an updated technical analysis for USD/CAD.

The US economy continues to expand at a brisk clip, as  third quarter growth beat expectations  with an excellent reading of 3.5%. However, durable goods  orders were mixed. Consumer confidence also looked sharp, rising for a second straight month. In Canada, CPI indicators posted declines, but retail sales were unexpectedly strong.

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USD/CAD daily graph with support and resistance lines on it. Click to enlarge:

USD/CAD opened the week at 1.3340 and quickly dropped to a low of 1.3317. The pair then sharply reversed directions and climbed to a high of 1.3557, testing resistance at 1.3551 (discussed last week). USD/CAD closed the week at 1.3539.

Live chart of USD/CAD:

Technical lines, from top to bottom

With USD/CAD continuing to post sharp gains, we start from higher levels:

1.3911 was last tested in February.

1.3813 provided a cushion in December 2015 and January 2016.

1.3648 was an important support level in February.

1.3551 was tested in resistance and is currently a weak line. It could see action early in the week.

1.3433 was the high point in October.

1.3351 has switched to support following strong gains by USD/CAD.

1.3219 has strengthened in support.

1.3124 is the final support level for now.

I am bearish on USD/CAD

The Canadian dollar has sagged badly since mid-December and the slide could continue. With no Canadian events this week, the loonie could lose ground if US numbers meet expectations.

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