- USD/CAD is trading in a narrow range, largely unchanged at 1.2415 at the time of writing.
- Mixed US jobs numbers on Friday failed to offer any respite to the USD bulls, sentiment around the greenback broadly undermined.
- On the other hand, Canada's employment rose by 78.6K, pulling the unemployment rate to 5.7% from 5.9% and beating the market estimate of 6%.
- Upbeat data is likely to keep the loonie supported as it ramps up the probability of the BoC hiking rates in 2018.
- The pair has shown a decisive close below 200W SMA at 1.2595 in the previous week.
- We see scope for further downside, bears now target major trendline support at 1.22 levels.
- Technical indicators on daily charts are bearish. 5-DMA is sharply lower, RSI weak below 30 levels.
- We see -ve DMI dominance and ADX is at 43 levels and biased higher, thereby supporting trend lower.
- Immediate support is seen at 61.8% Fib at 1.2387, while 5-DMA at 1.2471 is immediate resistance.
Support levels - 1.2387 (61.8% Fib retrace of 1.2058 to 1.2920 rally), 1.2340 (Sept 1 low), 1.23, 1.2258 (78.6% Fib)
Resistance levels - 1.2471 (5-DMA), 1.25, 1.2590 (38.2% Fib)
Recommendation: Good to go short on rallies around 1.2415/20, SL: 1.2475, TP: 1.2385/ 1.2340/ 1.23.
FxWirePro Currency Strength Index: FxWirePro's Hourly USD Spot Index was at 68.6575 (Neutral), while Hourly CAD Spot Index was at 59.1021 (Neutral) at 1000 GMT. For more details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex.
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