USD/CAD Outlook: Loonie Advances after Solid Data But Key Supports Hold for Now

Technical analysis of Forex market

The pair dipped to new multi-month low at 1.3068 (also low of 1 Feb) on Friday, following stronger than expected Canada’s GDP (Apr 0.3% m/m vs 0.1% f/c) which additionally boosted the loonie. The pair holds in steep descend for the past two weeks, as greenback was pressured by rising expectations for Fed rate cut, while Canadian dollar was additionally inflated by upbeat CPI and solid GDP data. Bears tested 1 Feb trough at 1.3068 which lays just above another pivotal support at 1.3052 (Fibo 38.2% of 1.2061/1.3664 ascend. Firm break of these levels would spark further weakness for test of next significant supports at 1.3000/1.2956 (psychological/weekly cloud base). The pair is on track for the second straight strong weekly loss that adds to negative outlook, however, flat momentum and oversold stochastic warn that bears may take a breather before resuming. Corrective upticks are expected to hold below falling 10SMA (1.3214) and keep larger bears intact. The markets are awaiting the outcome of Trump/Xi meeting, as the most important event this week, for fresh signals.

Res: 1.3100; 1.3137; 1.3185; 1.3214
Sup: 1.3068; 1.3052; 1.3000; 1.2956

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