The pair accelerated lower on Friday following double upside rejection at strong barriers provided by the base of thick daily cloud and 55SMA (1.3317/32). Better than expected Canada’s Jan housing/labor data added to loonie’s fresh strength.
Canada’s housing starts beat forecast in Jan (208K vs 205K f/c) while upbeat jobs data showed 66.8K new jobs in Jan vs 8K f/c and downward revised Dec figure at -1.3%, boosted Canadian dollar despite higher than expected unemployment (Jan 5.8% vs 5.7 f/c).
Daily techs work in favor of further weakness as momentum broke into negative territory and stochastic is overbought.
Thursday’s close above Fibo barrier at 1.3296 (38.2% of 1.3664/1.3068) generated short-lived bullish signal as further advance faced strong headwinds from daily cloud and subsequent reversal weakened near-term structure.
Fresh weakness cracked 20SMA support (1.3240) but close below here and nearby 1.3230/21 supports (Fibo 38.2% of 1.3068/1.3329 (1.3230/top of thick 4-hr cloud) is needed to signal reversal and lower top at 1.3329 (today’s high).
Res: 1.3294; 1.3317; 1.3332; 1.3374
Sup: 1.3240; 1.3221; 1.3209; 1.3191