The pair fell sharply and hit the lowest levels since 1 May on Friday, after US inflation fell below expectation and upbeat Canada’s labor data boosted loonie. US CPI rose 0.3% in Apr, missing 0.4% forecast after inflation rose by 0.4% in Mar and suggesting that underlying inflation remains muted that would keep Fed on hold for the time being.
On the other side, Canada added record 106.5K jobs in Apr, strongly overshooting forecast for 10K new jobs.
Canada’s unemployment fell to 5.7% in Apr (the lowest in 2019) vs 5.8% forecast and Mar figure.
Fresh bearish acceleration from pre-data high (1.3467) dipped below 1.3400 round-figure support and eyes targets at 1.3376 (1 May trough) and 1.3368 (Fibo 61.8% of 1.3273/1.1.3520, reinforced by rising 55SMA).
Daily indicators turned south and support the action which also broke below daily 10/20 SMA’s and looks for close 1.3376/68 pivots to confirm break out of two-week congestion between 1.3520 and 1.3467.
The pair is also on track for the second straight bearish weekly close that adds to negative outlook.
Res: 1.3423; 1.3444; 1.3484; 1.3505
Sup: 1.3376; 1.3368; 1.3336; 1.3300
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