USD/CAD Outlook: Upbeat Canada Jobs Data Accelerate Pullback after Thick Cloud Base Capped Strong Advance

Technical analysis of Forex market

The pair accelerated lower on Friday following double upside rejection at strong barriers provided by the base of thick daily cloud and 55SMA (1.3317/32). Better than expected Canada’s Jan housing/labor data added to loonie’s fresh strength.

Canada’s housing starts beat forecast in Jan (208K vs 205K f/c) while upbeat jobs data showed 66.8K new jobs in Jan vs 8K f/c and downward revised Dec figure at -1.3%, boosted Canadian dollar despite higher than expected unemployment (Jan 5.8% vs 5.7 f/c).

Daily techs work in favor of further weakness as momentum broke into negative territory and stochastic is overbought.

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Thursday’s close above Fibo barrier at 1.3296 (38.2% of 1.3664/1.3068) generated short-lived bullish signal as further advance faced strong headwinds from daily cloud and subsequent reversal weakened near-term structure.

Fresh weakness cracked 20SMA support (1.3240) but close below here and nearby 1.3230/21 supports (Fibo 38.2% of 1.3068/1.3329 (1.3230/top of thick 4-hr cloud) is needed to signal reversal and lower top at 1.3329 (today’s high).

Res: 1.3294; 1.3317; 1.3332; 1.3374
Sup: 1.3240; 1.3221; 1.3209; 1.3191

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