USD/CAD Outlook: Loonie Advances Further on Dovish Fed and Downbeat US ADP Jobs Data

Technical analysis of Forex market

The pair holds firmly in red and extends weakness for the third straight day, to crack pivotal Fibo barrier at 1.3375 (38.2% of 1.3068/1.3564) on Wednesday. The greenback fell across the board on dovish steer from Fed and was additionally hit by downbeat US ADP private sector employment data on Wednesday (May 27K vs 180K f/c and 271K in Apr). The ADP figure is often seen as an indication for more significant US NFP data release (due on Friday; 185K f/c vs 263K in Apr) which could further sour the sentiment on miss. Strong bearish momentum adds to pair’s negative stance which requires confirmation on sustained break below 1.3375 trigger that would open way towards 100SMA (1.3347) and 1.3316 (Fibo 50%) in extension. Broken daily cloud top and 55SMA (1.3412/14) mark solid resistances and expected to ideally keep the upside protected and guard a cluster of south-turning and converged MA’s at 1.3451/59 zone (30;20;10SMA).

Res: 1.3397; 1.3414; 1.3451; 1.3459
Sup: 1.3375; 1.3362; 1.3347; 1.3316

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