The pair dented psychological 1.2500 support on fresh extension of broader downtrend on Monday. Loonie received support from better than expected Canada wholesale sales, keeping very firm tone against the greenback. Technical studies remain is strong bearish setup and favor final push towards target and key support at 1.2459 (3 May 2016 low). Meanwhile, bears may show stronger hesitation at important 1.2500 support, although daily indicators continue to point lower despite being in deep oversold territory and lacking any signal of reversal. The pair is riding on extended wave C (commenced from 1.3538)v which approached its FE 261.8% at 2.2484 and may extend to its FE 300% at 1.2330 on sustained break below 1.2459 support. The first solid resistance lies at 1.2659 (falling 10SMA) followed by daily Tenkan-sen (1.2718) with break of these barriers needed to signal stronger recovery. FOMC meeting ends on Wednesday and markets are expecting fresh signals on tone of Fed’s post-meeting statement.
Res: 1.2552; 1.2608; 1.2659; 1.2718
Sup: 1.2484; 1.2459; 1.2400; 1.2330
