USDCAD Pare Gains After Another Round Of Dismal Data from USA

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USDCAD gives up some gains after another round of dismal data from the US economy. The United States Initial Jobless Claims came in at 2123K above the expectations of 2100K in May as the layoff in the USA continues. The previous month revised higher to 2446K previously reported at 2438K. The 4-week moving average was 2,608,000, a decrease of 436,000 from the previous week’s revised average The US jobless claims have risen to 40 million since the lockdown.

The U.S. Gross Domestic Product Annualized came in at -5%, below the forecasts of -4.8% in the first quarter, the fourth quarter of 2019 was at 2.1%. The Durable Goods Orders dropped to -17.2% but beat the forecasts of -19% in April. The Gross Domestic Product Price Index came in at 1.6% above the forecasts of 1.4% in the first quarter.

On the other side of the equation, Canada reported that Current Account came in at -17.32B, below the forecasts of -10B in the first quarter.

Canadian Loonie doesn’t get a hand today from crude oil as it trades mixed. The WTI crude oil price is 0.49% lower at 32.65, while the Brent crude oil price is 1.57% higher at 36.03%.

 

USDCAD Price Technical Analysis 

The USDCAD is 0.04% higher at 1.3757, making fresh 10-week lows earlier today as the correction from four-year highs continues. The correction accelerated after the pair breached below the 50-day moving average on May 18th and now positioning for a test of the 100-day moving average. The technical picture has improved for the short term below the 50-day moving average. However, the long term outlook remains bullish for USDCAD as long as the pair holds above the 100-day moving average.

On the upside, the first resistance for USDCAD stands at 1.3789 the daily top. If the pair moves higher, the next obstacle will be met at 1.3818 the high from yesterday’s trading session. In case the bullish momentum persists in USDCAD, the next resistance stands at 1.4047 the 50-day moving average.

On the flip side, immediate minor support for USDCAD stands at 1.3734 the daily low. If the pair breaks below 1.3734, the next critical support will be met at 1.3709 the 100-day moving average. The next target for bears is at 1.3609 the low from March 10th.

 

USDCAD Chart

 

By Nikolas Papas, Senior Market Analyst at Investingcube.com. He trades with an ATFX MT4 account.

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