30/04 USDCAD: Technically and fundamentally slowing down


The U.S GDP report released yesterday showed further slowdown of U.S economy when it came at 0.2% vs. forecasted 1%. After the release, Loonie plunged 100 pips down. However, the policy makers applied a hawkish tone, according to the FOMC statement, and neglected the recant bad data as likely temporary. In the meantime, oil keeps rising from its 3 months consolidation.

Today’s news: Canadian GDP m/m, BOC Gov Poloz Speech and U.S Unemployment Claims.

Canada’s economy is forecasted for another month of shrinkage at -0.1%, most likely due to fall in energy prices. From Gov Poloz Speech further clues on prospective monetary policy are expected.

From technical point of view, looking at the daily timeframe, Loonie is strongly bearish. MACD keeps forming lower bars below the line, RSI rests at the 30 level and 50 SMA is looking at the bears. Furthermore, RSI has finally broken the 50 level on a weekly time-frame.

USDCAD, 30th of April, Daily Time-frame, Loonie Chart 1 – USDCAD 30th of April – Daily Time-frame, Loonie is strongly bearish (9:02GMT)

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On the hourly timeframe, price just bounced from the 50 MA and now hangs on the Fibonacci’s 50% @ 1.201. However, both 50 and 200 SMA’s are showing down – providing bearish pressure. Signalling that the “fence” shell be breached by bears. Alternatively, if the 50 MA would be broken to the upside, price movement up to 1.21 level could be seen.

USDCAD, 30th of April Chart 2 – USDCAD 30th of April – Hourly Time-frame, hanging on the Fibo 50% (9:02GMT)

Having strong downward trend, long positions are not advisable. After today’s news release, in case of worse news for Loonie:

Order: Sell
At: 1.1990
SL: 1.2075
TP: 1.1830

As Canada is strongly dependant on oil exports to U.S, a close watch of oil prices is needed.

Support and Resistance levels:

R2 / Week’s Pivot l., Fibo 38.2% @ 1.22
R1 / 1.21
S1 / Fibo 50% @ 1.201
S2 / Fibo 61.8% @ 1.182

 

Author: Edmundas Povilavicius
Published time: (9:02GMT)

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