FxWirePro: USD/CAD hits 18-month high, scope for further upside

• USD/CAD climbed to an 18-month high on Monday as the Canadian dollar came under pressure following data showing that the country’s services sector contracted for a fourth consecutive month.

• Canada’s services sector contracted in September, with tariffs and the Middle East conflict adding to economic uncertainty, according to S&P Global’s latest Canada Services PMI data..

•  The headline Business Activity Index rose to 48.3 in September from 46.8 in August but remained below the 50.0 threshold, signalling continued contraction in the services sector..

• Oil prices, a key Canadian export, declined as higher crude exports from the Middle East and a pledge by G7 nations to increase supplies weighed on the market.

•  Technical highlight upside risks for USD/CAD, with momentum studies, 5, 10 and 11 DMAs tracking north.

•  Immediate resistance is located at 1.4291(23.6%fib), any close above will push the pair towards 1.4343(Higher BB).

• Support is seen at 1.4156 (38.2%fib) and break below could take the pair towards 1.4046 (50%fib).

Recommendation: Good to buy  around 1.4230, with stop loss of 1.4150,,  and target price of 1.4300