FxWirePro: USD/CAD extends drop, faces 50%fib support

• USD/CAD extended decline on Wednesday  as dollar weakened as traders ramped up bets on Federal Reserve rate cuts following U.S. economic data.

• U.S. private payrolls unexpectedly declined in November, according to the ADP National Employment Report, pushing traders to lean more on private data with official employment figures delayed until after next week’s policy meeting.

• Separately, a survey showed U.S. services activity was steady in November, with investors focusing on prices paid, which eased only slightly ahead of Friday’s personal consumption expenditures report, the Fed’s preferred inflation gauge.

• Traders' expectations for a 25-basis-point cut at next week's Fed meeting rose to 89% after the data, up from around 87% earlier in the day, CME's FedWatch Tool showed.

•Canada's labor market report for November is due on Friday, with the economy seen shedding 5,000 jobs last month, as per a  poll of economists.

•  Immediate resistance is located at 1.4035(38.2%fib), any close above will push the pair towards 1.4053 (SMA 20).

• Support is seen at 1.3959(50%fb) and break below could take the pair towards 1.337(Lower BB).

Recommendation: Good to sell  around 1.3960, with stop loss of 1.4080  and target price of 1.3860