USDCAD At 5-Week Lows; At Key Critical Support Level
The USDCAD is now at a critical support level after a stellar performance by the Canadian Dollar this week. The USDCAD is trading lower on the day to add to its previous lows for the week, and is now at a 5- week low. The driver for this price movement has mostly been the strongly disappointing US Retail Sales and Philly Fed Manufacturing report, coupled with upbeat Canadian manufacturing data released earlier in the week.
The Canadian manufacturing sales data showed an increase of 0.8% ($57.6 billion) in August as opposed to the -1.3% results seen the previous month. US Retail Sales and its core component came in at -0.3% (versus 0.6% the previous month) and -0.1% (versus 0.2% the previous month).
In addition, the Baker Hughes Oil Rigs Count went up to 713 from the previous count of 712. However, this has had very little impact on price action so far.
Technical Outlook for USDCAD Heading Into Next Week
The double blow for the USDCAD sent the pair tumbling to touch off the support price of 1.3133 (Feb 27, July 30 and Oct 7-10 lows). This area is also marked by the 23.6% Fibonacci retracement from the swing high of May 31 to the swing low of July 19.
A break below this area could send the pair down to 1.3065 (Feb 1 low) and possibly 1.3008 (early July 2019 lows).
On the flip side, recovery of the pair from present levels could possibly send the pair back to the 38.2% Fibonacci retracement area to retest the 1.3223 price level (Feb 26 and June 21 highs).