USDCAD Rally Halted?

USDCAD Rally Halted?

USDCAD Rally Halted?

USD/CAD experienced its strongest one-day decline in 8 trading days. The currency pair is finally waking up to fundamentals after trading erratically on Friday. Oil prices rose another 2.67% on Monday after increasing sharply on Friday. At the end of last week we learned that Canada added 67k jobs in the month of September, the largest increase since April 2012. There was a decent mix between full and part time work, which helped to lift the participation rate to 65.7%. Manufacturing activity also accelerated quickly with the IVEY PMI index jumping to 58.4 from 52.3, the highest level since January. Given these reports USD/CAD should have traded sharply lower particularly in light of the softer non-farm payrolls report.

Technically, the currency pair has fallen back below the 200-day SMA and now appears posed for a move down to the 50-day SMA near 1.3060. If it rises back above 1.3250, then a run to 1.33 becomes possible.

Chart Of The Day

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