USDCAD continues it’s trip south as investors continue to dump U.S. dollar as they are shifting their attention to more risky assets. The improvement in sentiment boosts Canadian dollar, which is also helped by the rally in crude oil price after the agreement to cut the crude oil production for one more month until the end of July.
On Friday, the pair breached below the 200-day moving average after stronger than expected employment data from the USA and Canada. The U.S. unemployment dropped to 13.3% while the forecast was looking for an increase to 20%. The U.S. Non-farm Payrolls increased by 2,5 million in May, beating the estimates of -8 million jobs loss.
In Canada, the Employment change surprised, positive with the addition of 289.6K jobs well above the consensus of -500K. The unemployment rate for May came in at 13.7% below the expectations of 15.0%.
The USDCAD is 0.21% lower at 1.3389 as the bears took control of the pair since Friday after broke below the 200-day moving average. USDCAD trades below the 200-day moving average for the first time since January 31. The technical indicators point to lower levels, but sellers have to be cautious as the price is now at an oversold level that might lead to a sharp rebound.
On the downside, initial support for USDCAD stands at 1.3372 the daily low. If the pair breaks below 1.337, the next critical support will be met at 1.3328 the low from March 4. USDCAD next target for sellers is at 1.3271 the low from February 26.
On the flip side, the immediate resistance for USDCAD stands at 1.3436 the daily top. If the USDCAD pair moves higher, the next obstacle will be met at 1.3464 the 200-day moving average. In case the bullish momentum persists, the next resistance stands at 1.3575 the high from June 3.